Global stocks rally as US eases Huawei restrictions

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NEW YORK

Global equity markets rose on Tuesday, led by chipmakers and companies exposed to Asia, after the United States temporarily eased trade restrictions imposed on China’s Huawei Technologies, while the dollar rose on a flight to quality. Major European stock markets rose and Chinese indices gained more than 1 percent after the Commerce Department late on Monday allowed Huawei to buy U.S. goods until Aug. 19 to maintain existing telecoms networks and provide software updates to its smartphones.

Shares of US suppliers to Huawei, including Qualcomm, Intel Corp and Lumentum Holdings Inc rose, with the PHLX Semiconductor Index up more than 2%. In Europe, the tech sector rose 1.49% after losing almost 3% on Monday, as chipmakers AMS AG of Austria, Franco-Italian STMicroelectronics and Germany’s Infineon all gained. The Trump administration is very sensitive to stock market declines and the Huawei stay of execution may provide a short-lived relief, said Kristina Hooper, chief global market strategist at Invesco in New York.

The 800-pound gorilla is U.S.- China trade relations and those are deteriorating, Hooper said.

We might get positive news on relatively small trade developments like this extension for Huawei, but that doesn’t change the bigger picture in regard to the US and China. MSCI’s gauge of stock performance in 47 countries across the globe gained 0.58% while the pan-European STOXX 600 index rose 0.40%. Earlier in Asia, China’s Shanghai Composite index closed up 1.23% and the blue-chip CSI300 index ended 1.35% higher.

On Wall Street, the Dow Jones Industrial Average rose 185.66 points, or 0.72%, to 25,865.56

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