Stocks surge on receding trade war fears

LONDON (APP): A wave of optimism flowed across stock markets on Tuesday as Wall Street built on the previous day’s gains after fears of a US-China trade war receded further. Speculation that Kim Jong Un paid a surprise secret visit to Beijing also lifted spirits as the North Korean strongman prepares for possible nuclear talks with US President Donald Trump.

“US stocks are adding to yesterday’s sharp recovery in early action, with trade war concerns between China and the US appearing to continue to cool,” Charles Schwab consultants said.

“Investors (are) buoyed by softening trade stance,” senior market analyst Craig Erlam of OANDA said.

Trump last week imposed tariffs on some $60 billion of Chinese imports over the “theft” of intellectual property.

The announcement came after his America First administration imposed tariffs on steel and aluminium imports, rattling financial markets around the world.

This week nerves were soothed as it emerged that high-level talks had been taking place between the world’s top two economies to find an agreement.

“Given the reaction we’ve seen in markets over the last couple of weeks I don’t think (Trump) will be keen to follow through on his threats and risk sending markets into a tailspin,” Erlam said.

In Europe, takeover activity boosted sentiment — with shares in GlaxoSmithKline jumping six percent after the British drugs giant agreed to buy Novartis’ stake in the pair’s consumer healthcare joint venture for $13 billion (10.4 billion euros).

The Swiss group said the sale of the 36.5-percent stake would enable it to focus on its core pharmaceutical business.

Earlier Tuesday, Asia also performed well, with Tokyo closing higher thanks to a drop in the yen against the dollar, as traders shifted out of assets considered safe in times of uncertainty and turmoil.

Seoul rose 0.6 percent and the won climbed more than one percent against the dollar on speculation Kim had visited China — in what would have been his first trip outside North Korea since assuming power at the end of 2011.

And if confirmed, the visit would mark the latest development in the fast-paced shift towards an easing of tensions on the Korean peninsula.