Sunday 20 October 2019

Sterling lags global stocks recovery

Stock image
Stock image

Reuters

Global stock markets climbed yesterday as signs of a thaw in the US-China trade battle helped investors overlook heightened uncertainty over Brexit and French protests, while oil prices rebounded from a selloff a day earlier.

In Dublin, the Iseq was up 1.5pc and there were big gains for names including CPL Resources, Kingspan and First Derivatives.

A report that China is moving to cut import tariffs on American-made cars pushed European stocks higher as car stocks jumped and the market interpreted this as a sign China is ready to make concessions on trade. Shares of US carmaker General Motors jumped 3.5pc while Ford Motor climbed 1.4pc.

Signs of progress in the trade talks helped Wall Street build on Monday's gains.

Germany's DAX, the most China-sensitive market in Europe which entered bear market territory last week, climbed 1.9pc.

However, Britain's exit from the European Union remained an uncertainty for investors, and held sterling near 20-month lows after British Prime Minister Theresa May postponed a vote on her deal.

German leader Angela Merkel ruled out further Brexit negotiations but said efforts were being made to give Britain reassurances.

Sterling was last trading at $1.2518, down 0.33pc on the day after hitting a low of $1.25.

European bond markets were focused on France as President Emmanuel Macron announced wage rises for the poorest workers and tax cuts for pensioners, raising concerns over fiscal spending that sent French bond yields to their highest level over Germany's in 19 months.

Irish Independent

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