Global markets rise despite trade war escalation

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LONDON

World equities rose on Friday as investors bet on Beijing and Washington resolving their trade war, despite news of a doubling in US tariffs on Chinese goods, dealers said. In a brief respite from trade woes, Uber is set for its Wall Street debut later Friday with a vast share offering that values the ride-hailing giant at more than $82 billion. US President Donald Trump has pulled the trigger on a steep increase in tariffs on Chinese goods, ramping up punitive duties on $200 billion in imports from 10 to 25 per cent in a major escalation of the bitter trade war between the world’s two biggest economies.

However, Russ Mould, investment director at stockbroker AJ Bell, said markets were adopting a wait-and-see approach — and he suspected that a deal would eventually be clinched. Investors hate uncertainty as it leads to speculation about what might and might not happen. Once they have the real facts, investors can properly assess the situation, Mould told media. I suspect that markets still believe a deal can and will be done, because both President Xi and President Trump need one, he added.

The tariffs news failed to derail markets in Asia and Europe, after Trump stated also that he had received a beautiful letter from China’s President Xi Jinping and that it was possible to get a deal. Xi needs a deal to keep economic growth on the road, because the ongoing credibility and legitimacy of his tenure and the Communist Party more generally rests on jobs and prosperity, said Mould. — Agencies

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