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Markets mostly climb but Chinese yuan takes another tumble

LONDON: Global stock markets mostly rose Tuesday on hopes of avoiding a trade war following the G7 summit in Biarrit

Aug 27 2019

LONDON: Global stock markets mostly rose Tuesday on hopes of avoiding a trade war following the G7 summit in Biarritz, but China's yuan currency nevertheless slumped to a new 11.5-year low.

Frankfurt and Paris shares advanced, but London fell as British investors played catch-up after a three-day holiday weekend.

Asian equities mainly gained, recovering from the previous day's pounding after President Donald Trump said China-US trade talks would resume soon.

Yet China's beleaguered yuan nosedived in morning Tuesday deals to 7.1722 yuan to the dollar-- a level last seen in 2008.

The unit had already plunged Monday on weekend news that Washington would hike tariffs on more than half-a-trillion dollars of Chinese imports, after Beijing unveiled levies on tens of billions of dollars of US goods.

"It's been a rollercoaster ride of trade war sentiment over the last few months and it seems traders have now entered into a state of confusion at where things actually currently stand," said analyst Craig Erlam at trading firm Oanda.

"A sudden and significant escalation in the trade war last week came as China and the US both announced new tariffs -- well, an increase in the case of the latter -- triggering another plunge in stock markets as investors fled for safety.

"This was followed by mixed messages from the US President, who initially admitted to having second thoughts which the White House later clarified as not being more aggressive."

However, Trump later said in a G7 news conference in France that negotiations would resume very soon and Beijing had telephoned saying it wanted to strike a deal.

He later described the talks as "more meaningful than at any time", while China's top negotiator called for calm and said he opposed any escalation in the stand-off.

In commodities, oil prices rose after Trump said he was prepared to meet Iran's Hassan Rouhani in the next few weeks, following talks over Tehran's nuclear programme at the G7 summit.

"Expectations are ... rising that tensions in the Gulf can be de-escalated following President Macron's overtures to broker a meeting between Donald Trump and his Iranian counterpart," noted AxiTrader analyst James Hughes.

- Key figures around 1045 GMT -


London - FTSE 100: DOWN 0.2 percent at 7,078.97 points

Frankfurt - DAX 30: UP 0.4 percent at 11,699.27

Paris - CAC 40: UP 0.2 percent at 5,359.78

EURO STOXX 50: UP 0.3 percent at 3,357.54

Tokyo - Nikkei 225: UP 1.0 percent at 20,456.08 (close)

Hong Kong - Hang Seng: DOWN 0.1 percent at 25,664.07 (close)

Shanghai - Composite: UP 1.4 percent at 2,902.19 (close)

New York - Dow: UP 1.1 percent at 25,898.83 (close)

Dollar/yuan: UP at 7.1610 yuan from 7.1512 yuan

Euro/dollar: UP at $1.1106 from $1.1102

Dollar/yen: DOWN at 105.81 yen from 106.12 yen

Pound/dollar: UP at $1.2266 from $1.2217

Euro/pound: DOWN at 90.57 pence from 90.87 pence

Brent North Sea crude: UP 69 cents at $59.39 per barrel

West Texas Intermediate: UP 62 cents at $54.26

Copyright AFP (Agence France-Press), 2019