European markets opened strongly this morning after Chinese President Xi Jinping promised a “new phase of opening up” for China in his keynote address early this morning to the Boao Forum for Asia. The Chinese leader’s speech also allayed fears of a looming US-China trade confrontation.
The FTSE opened 44 points up at the start of trading, a jump of 0.61 per cent. The Europe-wide Stoxx-50 also jumped nearly 20 points this morning, while Germany’s DAX was up a full percentage point, climbing to 12,428.90. The French CAC index also climbed 10 points, or about a quarter of a percent.
“President Xi’s speech overnight appears to have struck the right tone, providing some relief for investors who have been buffeted by the recent war of words between Trump and China over trade,” said Rebecca O’Keeffe, head of investment at Interactive Investor. “Today’s speech was the clearest indication yet that China is prepared to take concrete steps to address some of Trump’s chief criticisms. The big question is whether President Trump will now take the olive branch offered by Xi’s conciliatory approach”.
Europe’s strong opening comes after Asian markets rallied overnight in the wake of President Xi’s promise to continue with reforms to the Chinese economy. Japan's Nikkei share average .N225 rose 0.8 percent, helped by a jump in the transportation sector. The MSCI’s Asia-Pacific share index climbed 0.8 percent.
Read more: European and Asian markets rally
“Chinese President Xi Jinping unveiled a new set of economic reforms, including Trump-friendly plans to reduce tariffs,” said Jasper Lawler, head of research at London Capital Group. “Xi’s apparent desire to balance out his country’s international payments is clearly great news for countries and companies selling goods to China. We are still clinging on with gritted teeth to our belief that a trade war will be averted.”