World shares rise after U.S. drops planned tariffs on Mexico

Annabelle Liang, The Associated Press
Published Monday, June 10, 2019 12:00AM EDT
Last Updated Monday, June 10, 2019 5:42AM EDT

SINGAPORE -- World shares rose Monday after U.S. President Donald Trump suspended plans to impose tariffs on Mexico as the countries inked a deal on immigration. But worries remain over trade negotiations between Washington and Beijing.

France's CAC 40 climbed 0.3% to 5,378.16 and the FTSE 100 index in Britain added 0.5% to 7,370.11. German markets were closed for a holiday.

Wall Street was set to build on gains from last week, which was its best since late November. The S&P 500 futures contract picked up 0.3% to 2,884.30. Dow Jones Industrial Average futures edged 0.4% higher to 26,098.00.

After U.S. markets closed on Friday, Trump tweeted that Mexico "has agreed to take strong measures" to stem the flow of migrants from Central America into the United States. He added that 5% tariffs on imports from Mexico, meant to take effect Monday, were "indefinitely suspended."

The tariffs would have added to costs for American manufacturers and consumers.

The agreement with Mexico "appears to be a lower hanging fruit for the Trump administration," Jingyi Pan of IG said in a commentary. "The U.S.-China trade conflict meanwhile reckoned to remain an ongoing concern that looks have been caught in stalemate," she added.

Over the weekend, financial leaders of the Group of 20 major economies met in Fukuoka, Japan, and pledged to protect global growth. They said in a joint communique that risks from trade and geopolitical tensions were "intensifying."

The communique didn't single out the tariffs battle between the U.S. and China, but leaders signalled separately that it was the No. 1 concern.

U.S. Treasury Secretary Steven Mnuchin met China's central bank Gov. Yi Gang on the sidelines of the same gathering on Sunday. The two countries have concluded 11 rounds of trade talks with no agreement.

Mnuchin said on Twitter that the meeting was constructive and they had "candid discussion on trade issues." He did not give further details.

China announced better-than-expected trade data on Monday, spurring gains in Asia. The country's trade surplus surged 78% to $41.7 billion in May as its imports slipped and exports unexpectedly climbed.

Investors had expected both indicators to shrink with softening external conditions. Instead, China's customs agency said its exports grew 1.1% in May from a year earlier, trouncing expectations of a 3.8% decline by analysts polled by FactSet.

Reopening after a market holiday, Hong Kong's Hang Seng picked up 2.3% to 27,578.64 and the Shanghai Composite index was 0.9% higher at 2,852.13. Japan's Nikkei 225 advanced 1.2% to 21,134.42, while the Kospi in South Korea rose 1.3% to 2,099.49. Shares rose in Taiwan and throughout Southeast Asia. Markets in Australia were closed.

ENERGY: Benchmark U.S. crude gained 23 cents to $54.22 per barrel. The contract advanced $1.40 to $53.99 per barrel on Friday. Brent crude oil, the international standard, added 18 cents to $63.47 a barrel. It added $1.62 to $63.29 per barrel in the previous session.

CURRENCIES: The dollar rose to 108.60 Japanese yen from 108.17 yen late Friday. The euro retreated to $1.1301 from $1.1335.

Let's block ads! (Why?)