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Stocks gain on U.S.-China trade truce hopes, dollar flat

Published 2019-06-27, 11:59 a/m
© Reuters.  Stocks gain on U.S.-China trade truce hopes, dollar flat
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* Wall Street edges higher as tech, financials rise

* Dollar trades flat as market awaits news from G20 summit

* Crude prices slip ahead of G20, OPEC meeting

By Herbert Lash

NEW YORK, June 27 (Reuters) - Global equity markets gained and the dollar held steady on Thursday ahead of the G20 summit where a much-anticipated meeting of U.S. President Donald Trump and Chinese President Xi Jinping may lead to a truce in the U.S.-China trade war.

The world's two largest economies have agreed to a tentative truce in their trade dispute before the planned meeting on Saturday, Hong Kong's South China Morning Post reported, citing sources. report rekindled investor interest in riskier assets and weighed on safe-haven assets as it dialed down fears that Trump would impose new tariffs on $300 billion in Chinese goods.

A Wall Street Journal report that Xi planned to present Trump with a set of terms Washington should meet before Beijing is ready to settle their dispute tempered optimism. continue to be very skeptical that the U.S., at least this current administration, will reach a deal with China," said Kristina Hooper, chief global market strategist at Invesco in New York.

"I can't find any compelling reasons why China would make real concessions to the U.S.," Hooper said.

The dollar index .DXY , which tracks the dollar against the euro, Japanese yen, sterling and three other currencies, traded little changed at 96.214. The dollar also was little changed against the euro EUR= and the yen JPY= .

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.39%, while the pan-European STOXX 600 index .STOXX rose 0.13%.

Stocks on Wall Street mostly gained, though the Dow industrials were slightly lower.

The Dow Jones Industrial Average .DJI fell 45.33 points, or 0.17%, to 26,491.49. The S&P 500 .SPX gained 7.09 points, or 0.24%, to 2,920.87 and the Nasdaq Composite .IXIC added 37.71 points, or 0.48%, to 7,947.68.

Healthcare .SPXHC rose 0.55% and financials .SPSY gained 0.75%, with big lenders leading the charge ahead of results of the second part of the Federal Reserve's annual stress test for banks.

Semiconductor companies, which have a sizable revenue exposure to China, traded higher, with the Philadelphia Semiconductor index .SOX rising 1.13%.

U.S. Treasury debt yields fell on concerns that trade discussions between the United States and China on Saturday may be more complicated than previously expected.

News headlines suggest that "the meeting in Osaka is going to be a lot more tense than some of the initial optimism suggested," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.

The benchmark 10-year U.S. Treasury note US10YT=RR rose 6/32 in price to push its yield lower to 2.0278%.

German government bond yields fell back toward record lows after data showed annual inflation in the euro zone's biggest economy remained well below the European Central Bank's target.

Germany's 10-year bond yield was down 1.2 basis points at minus 0.32% DE10YT=RR , nearing Tuesday's record low of minus 0.336%.

Oil fell to almost $66 a barrel, weighed by concerns over whether the G20 summit will produce a breakthrough on trade and perceptions that supply is ample despite prospects for continued curbs by the Organization of Petroleum Exporting Countries.

Brent crude LCOc1 , the global benchmark, was down 24 cents at $66.25 a barrel. U.S. West Texas Intermediate crude CLc1 fell 9 cents to $59.29.

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