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Dec 3, 2018

European Markets At Close: European stocks surge on U. S-China trade breakthrough

Emily Horton

European stock markets tracked a global relief rally on Monday, after the U.S. and China agreed ease trade tensions at the G-20 this weekend in Argentina.
Resource, oil and auto stocks led the surge, with German equities experiencing their strongest one-day gain since April.
What are markets doing?
The Stoxx Europe 600 SXXP, +1.03%  jumped 1.3% to 362.13 after ending down 1.1% on 357.5 late on Friday.
Germany’s DAX DAX, +1.67%  was the biggest gainer rising 2.2% to 11,506.67, marking its biggest one-day rise since earlier this year, Italy’s FTSE MIB I945, +2.26%  was up 1.9% to 19,551.22 and France’s CAC 40 PX1, +1.00% rose by 1% to 5,054.11. The U.K.’s FTSE 100 UKX, +1.18% climbed by 1.8% to 7,104.51 having ended down 0.8% on Friday.
The euro EURUSD, +0.3269% rose to $1.1336 from $1.1320 late Friday in New York, while the British pound GBPUSD, -0.0784%  grew to $1.2798 from $1.2752 late on Friday.
What is driving the market?
Stocks around the globe rallied after Donald Trump and Chinese President Xi Jinping agreed to a cease-fire at the weekend G-20 meeting, with the U.S. promising not to implement planned tariff increases on a batch of scheduled Chinese exports worth $200 billion to the U.S.
Both leaders agreed to a 90-day truce between U.S. and China to allow for further time to progress trade talks between the two countries. Trump also said on Twitter that China will “reduce and remove” tariffs on U.S. cars.
Also supporting major indexes, crude prices CLF9, +3.08%  rallied 4%, driven by a surprise decision by Canadian producers to cut output, and comments from Russian President Vladimir Putin at the weekend G-20. Putin said he and his Saudi Arabia counterpart have agreed to extend their oil deal to manage supply, which drove optimism for the end-week OPEC meeting.
Which stocks were active?
German stocks saw the strongest one-day gain since April so far, with both Daimler AG DAI, +4.54% and BMW AG BMW, +4.78% up 5% each and Volkswagen AG VOW, +2.19%  surging 4%.
As China is a big user of natural resources, those stocks also saw a strong day, with Antofagasta PLC ANTO, +7.85%  up 7.4% and Rio Tinto PLC RIO, +2.20%  up over 5%.
Major oil companies also helped drive gains for European indexes, as crude prices CLF9, +3.08%  rallied 4%. BP PLC BP, +1.75% up by 2%, Royal Dutch Shell PLC RDS.A, +2.28% was up by almost 3% and Total SA FP, +1.32%  rose 2%.

Source: MarketWatch

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