LONDON – Hopes progress in China and US trade talks and expectations of central bank political stimulus lifted world stocks to 2 1/2 months high on Monday, although European Gains were withheld concern about the prospects of car manufacturers.
The MSCI Worldwide World Index increased 0.4 percent after Japan's Nikkei halted 1
Wall Street futures suggested US stocks would maintain last week's gains when trading resumes on Tuesday after Monday's holiday.
Dow and Nasdaq boasted eight consecutive weeks of gains in the US and China can solve its long-standing trade dispute.
Negotiations will resume this week, with US President Donald Trump saying he can be extended on a March 1 deadline for a deal. Both sides reported progress in last week's talks in Beijing.
The atmosphere was worse in Europe, where a pan-European stock index went into a four-month high. Gains were truncated by automakers, which were hit by data showing that Chinese car sales fell 16 percent in January, the seventh straight month of decline.
The car's index, a bellwether for Europe's economy, fell 0.4 percent. The industry was also rejected for fear that a report from the US Commerce Department would lead to tariffs on imported cars and auto parts. German shares have fallen by 0.1 per cent.
"The optimism of trading has been strong, but the underlying economic data has been much weaker – so you have some push and pull factors," said David Vickers, senior senior portfolio manager at Russell Investments. Much focus was now on flash PMI data because of this week, he said.
"As a setback from the December downturns, the foundations are now recovering (self)," Vickers added.
Poor financial data has driven expectations that the world's most powerful central banks would deliver reflective policies and provide support to the markets.
The need for stimulus was highlighted by data showing a slide in exports in Singapore and a large decline in foreign orders for Japanese hardware products.
Beijing is already trading, with China's banks making the most new loans on record in January in an attempt to revive weak investments.
Minutes of the Federal Reserve's latest policy meeting are due on Wednesday and should provide more guidance on the likelihood of interest rate increases this year. There is also talk that the bank will maintain a much larger balance than previously planned.
"Given the range of speakers since the January meeting that supports" patience ", the Fed minutes should repeat a hell of a message in general," TD Securities analysts said in a note.
The dollar was steady against the yen at 110.58, having relied on a two-month peak at 111.12.
After three consecutive weeks of sterling losses, investors were waiting for the outcome of the Brexit negotiations between the UK and the EU.
British Prime Minister Theresa May plans to speak to all EU leaders and EU Commission chief to apply for changes to the EU recall agreement, after another defeat by their own legislators last week.
It gave the dollar a shadow lower of 96,731 against a basket of currencies and away from last week's peak of 97,368.
In the commodity markets, oil prices peaked this year, buoyed by OPEC led supply chains and US pledges on Iran and Venezuela.