Europe close: Stocks gain ahead of high-level US-China trade talks

09 October 2019

(Sharecast News) - European stocks jumped on Wednesday following positive news on Sino-US trade relations and after the chairman of the US Federal Reserve indicated an openness to further interest rate cuts if necessary.
By the end of trading, the Stoxx 600 was 0.42% higher at 380.30, as the German Dax rose by 1.04% to 12,094.26 and France's CAC 40 climbed by 0.78% to 5,499.14. London's FTSE 100 added 0.33% to reach 7,166.50.

A report from <em>Bloomberg</em>, which cited an official with direct knowledge of Thursday's Sino-US trade talks, suggested that Beijing remained open to agreeing a partial trade deal as it looks to limit damage to its economy.

Optimism for progress in negotiations had taken a hit on Tuesday night when the US State Department slapped visa restrictions on Chinese government officials with alleged links to human rights abuses of Muslim minorities.

<em>IG</em> analyst Chris Beauchamp said: "Hints of a Chinese willingness to accept a partial trade deal have bolstered European markets in morning trading, suggesting that there might be reason for optimism despite the chest-beating of the past few days."

And overnight, Fed chairman Jerome Powell hinted that further rate cuts could be made before the end of the year, reiterating that the Fed will "act as appropriate to support continued growth, a strong job market, and inflation moving back to our symmetric 2pc objective".

Ipek Ozkardeskaya, analyst at<em> London Capital Group</em>, said that activity in the US treasury markets suggested an 81% chance for a 25-basis-point cut to interest rates by the end of October.

In Brexit news, sentiment was briefly lifted by a report from <em>The Times</em> which claimed that the EU could make a "major concession" to Prime Minster Boris Johnson by proposing a mechanism for the Northern Irish assembly to leave a new backstop after a number of years.

Among individual stocks, food delivery giants <strong>Takeaway</strong> and <strong>Just Eat</strong> gained after the former said orders had increased by 87% during the third quarter.

<strong>GVC Holdings</strong> was also in the green as the gambling company upgraded its full-year profit forecasts and posted strong third quarter trading driven by online revenue growth.

<strong>Qiagen</strong> shares on the other hand continued to fall following a Tuesday warning on sales on the back of weak third quarter trading in China.