Local sharemarket set to lift on upbeat US-China trade talk

World stocks rose on Friday as upbeat comments by Chinese President Xi Jinping and US President Donald Trump helped quell anxiety over the state of trade talks.

President Trump told Fox News a trade deal was “potentially very close” following remarks by China’s leader that Beijing wanted to work out an initial agreement.

The S&P 500 and the Dow showed their biggest daily gains in a lacklustre week marked by uncertainty, with a report suggesting the delay of a trade truce to 2020 and US lawmakers passing two bills supporting protesters in Hong Kong, which could complicate US-China talks.

Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, attributed Friday’s gains to strong US manufacturing data as well as the improving mood on trade. He said investors were cautious about the apparent trade progress, however.

“President Trump saying it’s close is news we’ve heard before. How close is close? Close but not quite or close but I could change my mind?” he said. “That’s what’s keeping the market on its heels at the moment, keeping the move a little bit more timid.”

Manufacturing output accelerated in November to its fastest pace in seven months and services activity picked up more than expected.

The Dow Jones Industrial Average rose 109.33 points, or 0.39 per cent, to 27,875.62, the S&P 500 gained 6.75 points, or 0.22 per cent, to 3,110.29 and the Nasdaq Composite added 13.67 points, or 0.16 per cent, to 8,519.89.

The positive news from Beijing had lifted European stock markets earlier in the day.

Britain’s FTSE 100 rose 1 per cent to 7,311, while the CAC 40 in France gained 0.3 per cent to 5,897. Germany’s DAX picked up 0.1 per cent to 13,146.

On Friday, the benchmark S&P/ASX200 index finished up 36.9 points, or 0.55 per cent, to 6,709.8 points, while the broader All Ordinaries was up 38.8 points, or 0.57 per cent, to 6,816.5 points.


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