Stocks Buzz Higher on Trade Talks, Virus Treatment Hopes

Asian and European stock markets mostly rose Tuesday with investors reassured by news that China and the United States have agreed to press on with their trade pact, while hopes for a virus treatment provided extra support.

The gains followed yet another record showing on Wall Street as coronavirus cases appear to be slowing in the United States, but also as Europe sees a worrying surge and as Hong Kong researchers identified what they said was the first confirmed case of reinfection.

China and the US provided dealers with much-needed cheer after announcing that top representatives had held phone talks on their trade agreement signed in January.

“A second strong day on the markets was most welcome news," said Russ Mould, investment director at online broker AJ Bell. 

"Driving the latest gains in equities was renewed hope of an amicable trade deal between the US and China.

"While optimism has quickly turned to pessimism on this topic many times in the past, it's encouraging to see the two sides talking rationally again," Mould added.

There had been concerns about the future of the deal as the countries' relationship grows increasingly fraught over issues including Hong Kong, the virus, Huawei and TikTok.

But on Tuesday, the commerce ministry said Vice Premier Liu He spoke to U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, and both sides "agreed to create conditions and atmosphere to continue to push forward the implementation of the phase-one of the China-US economic and trade agreement".

The US side added in a separate statement that the two had discussed steps China had agreed to address in the agreement, including intellectual property and forced technology transfer.

"The parties also discussed the significant increases in purchases of US products by China as well as future actions needed to implement the agreement. Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement," it added.

Global markets were already buoyant on growing optimism that a vaccine for the coronavirus is close, while the US Food and Drug Administration is looking to expand access to a virus treatment involving blood plasma from recovered patients.

Later this week, attention will turn to a virtual Jackson Hole Symposium meeting of central bankers, with the key event being Thursday's speech by Federal Reserve chief Jerome Powell. 

Investors hope Powell will provide an update on the world's top economy and some forward guidance on his plans for monetary policy.

- Key figures around 1050 GMT -

London - FTSE 100:  UP 0.2 percent at 6,117.53 points 

Frankfurt - DAX 30: UP 0.7 percent at 13,151.55

Paris - CAC 40: UP 0.7 percent at 5,042.71

EURO STOXX 50: UP 0.7 percent at 3,354.01

Tokyo - Nikkei 225: UP 1.4 percent at 23,296.77 (close)

Hong Kong - Hang Seng: DOWN 0.3 percent at 25,486.22 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,373.58 (close)

New York - Dow: UP 1.4 percent at 28,308.46 points (close)

Euro/dollar: UP at $1.1823 from $1.1788 at 2100 GMT on Monday

Dollar/yen: UP at 106.32 yen from 105.98 yen 

Pound/dollar: UP at $1.3105 from $1.3063

Euro/pound: DOWN at 90.93 pence from 91.19 pence

Brent North Sea crude: UP 0.5 percent at $45.35 per barrel

West Texas Intermediate: FLAT at $42.63 per barrel