Markets in the UK, Europe and across Asia rally despite looming US-China trade war

Markets across Europe and Asia have stabilised today, despite the looming prospect of a trade war between China and the US. The FTSE 100 climbed 20 points shortly after opening, while the Europe-wide Stoxx 50 was also up nearly 20 points, or 0.69 per cent.

Asian markets also rallied, led by gains in Hong Kong’s Hang Seng Index, which climbed over 380 points, or 1.29 per cent. Japan’s Nikkei 225 also rose 0.51 per cent, jumping 110 points. The Hang Seng China Enterprises Index was up 1.5 per cent, while the Shanghai Composite rose 0.4 per cent.

Read more: FTSE 100 closes lower as global markets struggle with trade war fears

“Concerns over the fallout from an intensifying trade war between the US and China have taken a back seat for the moment, despite more comments from Donald Trump over the weekend including the threat of another $100bn (£71.3bn) of tariffs against China,” said Fiona Cincotta, senior market analyst at City Index. “Instead, the focus has turned to solid earning reports from large Chinese companies leading to Asian stock markets trading higher”.

The rally in global markets comes after a poor performance for Wall Street stocks on Friday. The Dow Jones closed 572 points down, while the tech-heavy Nasdaq was down 2.2 per cent. The S&P 500 also dropped 1.7 per cent.

Read more: Gold up, dollar down: Markets react as China unveils retaliatory $50bn tariffs on US products

However, the dollar steadied on Monday, inching up 0.1 per cent against six major currencies to 90.19 after a dip of 0.4 per cent on Friday. Against the yen, the dollar rose 0.1 percent to 107 yen.

Yesterday, President Trump insisted that China would remove its trade barriers, and that both countries will come to an on agreement intellectual property. Trump also tweeted that he and Chinese President Xi Jinping “will always be friends, no matter what happens with our dispute on trade.”