LONDON (Reuters) – Prospects of a thaw in U.S.-China trade tensions supported global stocks on Monday, as U.S. President Donald Trump pledged to help ZTE Corp “get back into business, fast” after a U.S. ban crippled the Chinese technology company, while oil prices retreated from highs.
Trump’s comments on Sunday came ahead of a second round of trade talks between U.S. and Chinese officials this week to resolve an escalating trade dispute. China had said last week its stance in the negotiations would not change.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 47 countries, was up 0.1 percent, holding at its highest level in seven weeks and in positive territory for the year. European stocks were broadly flat as energy stocks .SXEP and financials weighed.
“There have been some very serious issues raised in terms of the trade relationship between the U.S. and China, and then they’ve had this quite sudden about-turn on this particular company, and it simply raises questions as to what the underlying policy is,” Alastair George, chief strategist at Edison Investment Research, said.
“This is perhaps a little reminder which is being relatively well-received by markets over the last 24 hours that (with) the U.S. administration there is a strong degree of unpredictability compared to prior regimes,” Edison’s George added.
The United States has said it will lift sanctions on Pyongyang if North Korea agrees to completely dismantle its nuclear weapons program.
Stocks in Asia were also upbeat. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.5 percent, while Japan’s Nikkei .N225 also tacked on 0.5 percent.
Elsewhere in Asia, the Malaysian ringgit MYR= recovered losses after sliding 1 percent to a four-month trough against the dollar in the first onshore trade since a shock election upset last week. Malaysian stocks sank as much as 2.7 percent at one point but were last up 1.5 percent.
Veteran Mahathir Mohamad came out of political retirement to lead the opposition Pakatan Harapan (Alliance of Hope) to a stunning victory defeating prime minister Najib Razak, a former protege he had accused of corruption.
Some investors were concerned that populist promises such as repealing an unpopular goods and services tax and restoring a petrol subsidy could undermine the country’s finances.