World stocks steady as economic optimism outweighs trade

Canadian Prime Minister Justin Trudeau and other world leaders expect tense discussions about trade at the G7 meeting

London (AFP) – World stocks held their ground on Thursday as bright US data reinforced global economic optimism, allowing investors to shrug off tensions ahead of an expected G7 affray over trade.

London, helped by a weak pound, was higher in the European afternoon, while Frankfurt, Paris and Milan equities were held back by euro strength weighing on the earnings prospects of exporters.

“Markets continue to brush aside fears over a potential trade war,” said IG analyst Joshua Mahony.

New York stocks rose in early Wall Street business, a day after the Nasdaq hit a third straight record following a strong reading on US exports for April, which indicated the world’s top economy is in fine fettle.

G7 leaders will descend on Quebec on Friday and Saturday for a summit dominated by world trade after Donald Trump sparked global fury by imposing steel and aluminium tariffs on Canada, Mexico and the European Union. 

That was met with retaliatory measures from all three.

Canadian Prime Minister Justin Trudeau and German Chancellor Angela Merkel have said they expect tense discussions, while Japanese Finance Minister Taro Aso has referred to the G7 as the “G6+1”, highlighting the growing divisions.

In currency deals, the euro meanwhile continued its recovery from last week’s Italy-fuelled plunge, with the European Central Bank’s top economist saying it would discuss winding down its crisis-era stimulus.

The European single currency — which had dallied with $1.15 last week — advanced once again above $1.18 on Thursday after breaching the level the previous day.

“The euro has been one of the biggest movers in the foreign exchange space this week, as rising expectations of a hawkish shift from the ECB next month drive a move into the single currency,” added Mahony.

– Key figures around 1335 GMT – 

London – FTSE 100: UP 0.3 percent at 7,733.14 points 

Paris – CAC 40: DOWN 0.1 percent at 5,454.63

Frankfurt – DAX 30: FLAT at 12,825.18

Milan – FTSE MIB: DOWN 0.2 percent at 21,767.62

EURO STOXX 50: FLAT at 3,461.38

New York – Dow Jones: UP 0.3 percent at 25,217.25

Tokyo – Nikkei 225: UP 0.9 percent at 22,823.26 (close)

Hong Kong – Hang Seng: UP 0.8 percent at 31,512.63 (close)

Shanghai – Composite: DOWN 0.2 percent at 3,109.50 (close)

Euro/dollar: UP at $1.1826 from $1.1774 at 2100 GMT on Wednesday

Pound/dollar: DOWN at $1.3398 from $1.3413

Dollar/yen: DOWN at 110.01 yen from 110.18 yen

Oil – Brent Crude: UP 70 cents at $76.06 per barrel

Oil – West Texas Intermediate: UP 53 cents at $65.26