Donald Trump withdrew his endorsement of a joint G7 statement
London (AFP) - Global equity markets rose Monday as traders brushed off a chaotic G7 meeting to focus instead on US President Donald Trump’s upcoming summit with North Korean leader Kim Jong Un.
Investors were also on tenterhooks ahead of this week’s European Central Bank and Federal Reserve interest rate decisions.
Stock prices mostly rose despite a contentious Group of Seven (G7) summit of leading economic powers in Canada which failed to end concerns of a global trade war, dealers said.
“The weekend G7 meeting in Canada didn’t disappoint those expecting a dysfunctional atmosphere,” said analysts at Charles Schwab.
“But any market impact over the fall-out appears muted in regards to the magnitude of the Singapore summit, as well as looming central bank decisions from the Big Three: the Fed, the European Central Bank and the Bank of Japan”.
Trump pulled out of endorsing a joint communique after the G7 meet finished on Saturday, accusing Canadian Prime Minister and summit chairman Justin Trudeau of dishonesty.
“Markets may be too complacent – but on the G7 split, investors think that a full-scale trade war will not take place. In my view, it is clearly a risk,” VTB Capital analyst Neil MacKinnon told AFP.
- Italy rules out euro exit -
European equities won support after new Italian finance minister Giovanni Tria emphatically ruled out the nation exiting from the single currency, with the Milan stock market surging two percent.
“European markets are rallying mainly because investors are less concerned about Italy as the Italian finance minister has assured that the country is committed to bring its debt lower,” said Naeem Aslam, analyst at trading firm Think Markets.
William Hamlyn, investment analyst at Manulife Asset Management, agreed.
“Markets are in a ‘risk on’ mode in Europe,” Hamlyn told AFP.
But sterling sank on grim UK official data that showed shrinking construction and manufacturing activity and sliding exports, as Britain’s European Union exit looms next year.
Cryptocurrencies plunged after a hack on a South Korean exchange sparked fresh concerns about the safety of the digital units.
Bitcoin tumbled 13 percent to its lowest level since April.
Oil prices meanwhile slid ahead to a key OPEC output meeting later this month.
- North Korea summit looms -
In Asia, the focus was squarely on Tuesday’s historic summit between Donald Trump and Kim Jong Un in Singapore, with Pyongyang’s nuclear programme top of the agenda.
“Barring any surprises the talks should mark a positive step in terms of easing geopolitical tensions in the region,” said ADS Securities analyst Konstantinos Anthis.
This week is also expected to see the Federal Reserve lift interest rates again, and traders will be poring over its post-meeting statement for an idea about future moves.
That will be followed by the ECB’s gathering, which could see policymakers discuss winding down its crisis-era stimulus programme.
- Key figures around 1335 GMT -
London - FTSE 100: UP 0.5 percent at 7,717.47 points
Paris - CAC 40: UP 0.2 percent at 5,458.68
Frankfurt - DAX 30: UP 0.1 percent at 12,779.38
Milan - FTSE MIB: UP 2.4 percent at 21,863.74
Madrid: IBEX 35: UP 1.0 percent at 9,840.90
EURO STOXX 50: UP 0.4 percent at 3,460.87
New York - Dow Jones: UP 0.1 percent at 25,343.29
Tokyo - Nikkei 225: UP 0.5 percent at 22,804.04 (close)
Hong Kong - Hang Seng: UP 0.3 percent at 31,063.70 (close)
Shanghai - Composite: DOWN 0.5 percent at 3,052.78 (close)
Euro/dollar: UP at $1.1796 from $1.1775 at 2100 GMT
Pound/dollar: DOWN at $1.3375 from $1.3416
Dollar/yen: UP at 109.90 yen from 109.32 yen
Oil - Brent Crude: DOWN 81 cents at $75.65 per barrel
Oil - West Texas Intermediate: DOWN 73 cents at $65.01