European stock markets have risen soon after the opening bell following US President Donald Trump’s decision to delay tariff increases on Chinese goods by two weeks.
Trump tweeted: “At the request of the Vice Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary on October 1st, we have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th.”
The move came a day after China yesterday delayed retaliatory tariffs on 16 US goods, such as some cancer drugs, for a year.
Germany’s Dax index had risen 0.2 per cent shortly after opening, while Britain’s FTSE 100 was also 0.2 per cent higher. The pan-European Euronext 100 was 0.5 per cent higher.
The Shanghai Composite index closed 0.8 per cent higher, while Japan’s Nikkei 225 also closed up 0.8 per cent. The Asian reaction was mixed, however, with Honk Kong’s Hang Seng index 0.1 per cent lower.
Danske Bank senior analyst Kristoffer Kjaer Lomholt said: “This morning’s announcement could drive an extension of the more upbeat market environment seen since last Wednesday, which stands in stark contrast to most sessions during August when trade and recession fears dominated.”
The concession from Trump came just weeks ahead of preliminary meetings between the two sides later this month. They will precede high-level talks in October aimed at finding a solution to the long-running trend war that has dented global economic growth and confidence.
Yet Lomholt said he was “sceptical of an eventual trade deal being reached already in October”.
Neil Wilson, chief market analyst at trading platform Markets.com called Trump’s decision “mere posturing”.
However, he added: “It at least means we look to these October high-level discussions with a bit more optimism.”
“Investors are lapping up any sign of positivity and any excuse to get pushed up the risk curve because central banks have come back in to the market and sent bond yields lower.”