By Tom Wilson
LONDON (Reuters) – World Shares on Friday basket in optimism for a US-China trade war crime and hope Britain moves closer to a smooth exit from the EU.
The MSCI World Stock Index (), which tracks stocks in 47 countries, rose 0.4% to move towards its first weekly gain of four weeks. The wider Euro STOXX 600 () also jumped 0.6%, led by a 1.1% gain for the Frankfurt main index ()
Asian stocks had risen earlier, with an index of stocks in Asia and the Pacific off Japan ( ) which climbed 1
The improvement in appetite for risky gambling came after US President Donald Trump on Thursday called the first day of trade talks with China over two months "very, very good."
Talks between US and Chinese dealers gave hope that the two sides could crack down on the 15-month trade war that has plagued financial markets and supply chains around the world, delaying a US tariff hike scheduled for next week.
Trump reiterated plans to meet China's Deputy Prime Minister Liu He on Friday at the White House.
Expectations of progress on Thursday had squeezed the US markets, with Wall Street () () reaching around 0.6%.
Nevertheless, investors said that the markets were hoping for a deal that was limited in scope at best, and they noted that sunny rhetoric in the past had failed to translate into more meaningful moves.
"I would warn that we have been him before, where we have seen positive talk," said Mike Bell, global market strategist at JP Morgan Asset Management.
"It is possible they will be able to make a smaller deal around tariff rates, where there is little room for movement."
Hoping for progress in the trade war increased risk-taking currencies and fixed the dollar. It traded at $ 7.0941 per dollar, the strongest since September 23.
Against a basket of currencies, the greenback was a touch softer at 98.655
"GLIMMER OF HOPE" ON BREXIT
Signs of progress in Brexit, the other long-standing geopolitical saga that underlines the markets, also emboldened investors.
After meeting with British Prime Minister Boris Johnson for talks, Irish Prime Minister Leo Varadkar on Thursday said that an agreement to allow Britain to leave the EU in an orderly fashion could be sealed at the end of the month.
Varadkar called the talks "constructive", while the two leaders said in a joint statement that they could "see a way to a possible agreement".
But it remained unclear what the couple agreed to.
Sterling held on to gains after rising 2% a day earlier, the largest daily percentage gain of seven months, to trade little changed at $ 1.2437.
But with Britain due to leave the world's largest trading bloc on October 31, the fate of Brexit remains in balance. Market participants said investors remained jealous. Movements in sterling reflected a tendency to jump at some signs of progress.
"We are moving toward a glimmer of hope, rather than a strong expectation that things will be done," Tim Drayson, chief financial officer of Legal & General Investment Management.
Nevertheless, Drayson said that any agreement reached between Dublin and London would then meet the British parliament's obstacle, even after reaching agreement by the European Union.
"I think the odds are that we are not reaching an agreement, but I do not expect a crash out on October 31."
Irish government bonds are ramping up and overperforming their peers in the euro area, according to Varadkar's comments. Shares in Dublin () jumped 1.8% to hit its highest in 2-1 / 2 months.
"We still believe that markets are probably underestimating the likelihood of a hard Brexit scenario," said Salman Baig, a cross-cutting asset investment manager at Unigestion.
In commodities, oil prices jumped 2% after Iranian news agencies said a state oil tanker was hit by two missiles in the Red Sea near Saudi Arabia, raising the prospect of supply disruptions from a crucial role of producing region.
Global reference index Brent Crude Oil () was up about 2.1% to $ 60.36 per barrel.