LONDON: Global stock markets rallied Wednesday on upbeat China-US trade news, while the pound hit yet another 20-month low as British Prime Minister Theresa May faces a no-confidence vote.
Oil prices jumped one dollar as volatility continued to grip world crude markets.
A flurry of positive developments in the tariffs stand-off between the world's top economies provided early Christmas cheer on trading floors, fuelling hopes an all-out trade war can be avoided.
In afternoon deals, Frankfurt fizzed 0.9 percent higher, London won 1.1 percent and Paris added 1.6 percent.
The positivity spilled over from Asia, where Tokyo ended 2.2 percent higher and Shanghai rose 0.3 percent, while Hong Kong jumped 1.6 percent.
"The equity markets are taking encouragement from recent reports of a potential truce in the US-China trade dispute," noted VTB Capital analyst Neil MacKinnon.
Canada on Tuesday released on bail Meng Wanzhou, chief financial officer (CFO) at Chinese telecoms giant Huawei, whose arrest last week sparked fury in Beijing and worries about a truce agreed at the G20 by Donald Trump and Xi Jinping this month.
Providing some extra support to the news of Meng's release was an interview in which Trump said he could intervene in the case if it helps seal a trade pact with China, adding: "Whatever's good for this country, I would do."
China added to market-friendly noise by saying it had agreed to cut tariffs on US autos to 15 percent from 40 percent -- wiping out a levy imposed earlier this year in response to US measures.
Investors welcomed the headlines but sounded a note of caution.
"Newsflow regarding developments in the US-China trade dispute has been notoriously erratic and positive news can quickly give way to negative news," added MacKinnon.
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