Stocks Soar Higher as Trade War Fears Ease, Dow Climbs 685 Points

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Wall Street stocks surged last night amid bargain-hunting and hopes that the U.S. and China could negotiate new terms of trade and avoid a trade war.

The Dow Jones Industrial Average .DJI rose 46.77 points, or 0.19 percent, to 24,249.37. The S&P 500 gained 1.66 per cent to 2,631.14 and the Nasdaq Composite rose more than 2 per cent to 7,134.25.

Premier Li Keqiang said Monday China would treat foreign and domestic firms equally, not force foreign firms to transfer technology and would strengthen intellectual property rights.

"There are some tentative signs that fears of an escalation of trade tensions are beginning to ease", Craig Erlam, a market analyst at OANDA, wrote in a note to clients, Reuters reported. The Nasdaq climbed about 3.25 percent as investors were reassured that a damaging trade war might be avoided.

The US last week announced proposed tariffs against China, which sent global markets tumbling.

Tokyo-listed stocks in the semiconductor equipment maker Tokyo Electron closed up 2.9%, as did shares in robot maker Yaskawa Electric Corp. They, along with other industrial stocks, have taken a beating in the wake of Trump's tariffs plans due to their exposure to China.

All three major US indexes were up more than 2 percent on the heels of their worst weekly performance since January 2016.

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The tech sector was on pace for its biggest daily percentage gain since January 2016 and financials were poised for their best day since March 2017.

Japan's Nikkei, meanwhile, erased earlier losses of 1.3 per cent to end 0.7 per cent higher.

Just last week, trade relations between the countries were tense, but the proposal for some $60bn (£42.5bn) worth of tariffs would not hit the Chinese economy as hard as first anticipated.

In Toronto, the S&P/TSX Composite Index was up 0.6 per cent to 15,321 points.

Crude oil futures steadied on Monday, supported by a rebound in stock markets and escalating Saudi-Iran tensions. He said he was "cautiously hopeful" of a truce between the two sides.

With nearly all FTSE 100 components higher, the principal drivers of today's outperformance (in terms of points contribution) are RDSB/BP (high oil price, weaker GBP), GSK (M&A), Miners (copper bounce, trade war relief), HSBC (trade war relief), AZN (GSK read-across, weaker GBP) and ULVR/BATS (weaker GBP), all adding at least 4pts a piece.

Brent crude futures were up 9 cents at $70.54 a barrel.

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