Global stocks recover, despite trade fight, as GE and US tech shares rise

New York — General Electric (GE) and US tech shares rose on Tuesday, helping global stock markets regain ground a day after a mounting trade fight between the US and other top world economies chased investors into safe-haven assets.

GE jumped 7.6%, the biggest percentage gainer on Wall Street’s S&P 500 index, after the company said it would spin off its healthcare business and divest its stake in oil-services company Baker Hughes.

Tech stocks rebounded from a sharp sell-off on Monday, after US government officials said plans were in the works to block firms with at least 25% Chinese ownership from buying US companies with “industrially significant technology”.

The Dow Jones Industrial Average rose 18.5 points, or 0.08%, to 24,271.3; the S&P 500 gained 2.99 points, or 0.11%, to 2,720.06; and the Nasdaq Composite added 14.48 points, or 0.19%, to 7,546.48.

Europe’s main stock exchanges also got a reprieve. A 0.3% rise on the FTSE 100 in London and 0.03% gain on the CAC 40 in Paris were a welcome sight after Asia had extended a sell-off that has wiped $1.5-trillion off world stocks.

Despite the modest gains, investors remained wary. “There is still generally a focus on trade and a bit of uncertainty over what we are going to hear from the Trump administration this week regarding potential investment restrictions,” said Brian Daingerfield, macro-strategist at RBS Securities in Stamford, Connecticut.

Escalating trade tensions between the US and China, as well as Washington and Europe, led two benchmark Wall Street indices on Monday to suffer their worst losses in more than two months and launched China into bear-market territory, with its major stock indices down 20% decline from January peaks.

After seeing a surge in buying on Monday, US treasury yields held at lower levels on lingering fears that trade tensions could hurt economic growth, though safe-haven buying was capped on anticipation of more interest rate hikes from the US Federal Reserve.

The tense atmosphere knocked down most industrial metal prices amid worries about the global economic fallout of the trade conflict between the US and China, which could hamper growth and metals demand. Copper and aluminium were at or near their lowest since April, while zinc plunged to its weakest since August last year.

In currencies, the dollar index rose 0.29%, with the euro down 0.32% to $1.1664. The yen weakened 0.12% against the greenback at ¥109.92, while sterling was last trading at $1.3244, down 0.23% on the day.

The Turkish lira firmed against the dollar in volatile trade amid uncertainty over economic policy under a new government due to be formed following President Recep Tayyip Erdogan’s victory in Sunday’s election.

In oil, prices rose on production losses in Canada, Libya and from the neutral zone between Saudi Arabia and Kuwait, but they remained under pressure from greater supply from others in oil cartel Opec and the escalating trade disputes.

US crude rose 0.26% to $68.26 a barrel and Brent was last at $74.19, down 0.48% on the day.

Reuters