The pan-European Stoxx 600 traded 0.1% down in early deals, with food and beverage stocks falling 0.7% while bank and auto stocks both jumped 0.5%.
· Asian shares hit five-week highs on Wednesday as investors wagered the Federal Reserve would follow the lead of the European Central Bank and open the door to future rate cuts at its policy meeting later in the day.
Indeed, ECB President Mario Draghi’s shock about-face on easing fueled talk of a worldwide wave of central bank stimulus, firing up stocks, bonds and commodities
Adding to the cheer was news U.S. President Donald Trump would meet with Chinese President Xi Jin ping at the G20 summit later this month, even though most analysts doubt there would be a decisive breakthrough to end their countries’ damaging trade dispute.
“We expect no real change following the G20 sideline meeting. (But) the fact that both sides are talking should at least postpone thoughts of a further increase in tariffs,” ING’s Greater China economist Iris Pang said in a note.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.8% in its biggest daily rally since January. Shanghai blue chips rose 1.9% to a six-week peak.
· Japan’s Nikkei rallied hard to end near six-week highs on Wednesday on news that the United States and China will revive talks on trade, while expectations the U.S. Federal Reserve will cut rates this year supported sentiment.
The Nikkei share average jumped 1.7% to close at 21,333.87, the highest closing level since May 10.
“Investors are taking heart from the new development. The two countries will at least be talking (after a lull), so the market thinks there is little chance that talks get broken off soon after they meet,” Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute.
· China stocks closed higher on Wednesday as Washington and Beijing looked to rekindle trade talks and confirmed that Presidents Donald Trump and Xi Jinping would meet later this month at the G20 summit.
Expectations of a worldwide wave of policy easing by central banks added to investors’ optimism.
The blue-chip CSI300 index rose 1.3% to 3,715.94 points, while the Shanghai Composite Index gained 1.0% to 2,917.80, paring morning gains
Trump said on Tuesday teams from the two sides would begin preparations for the leaders to sit down at the G20 summit in Japan.
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