Markets optimistic as US-China trade talks set

Global stocks rose Friday and Wall Street was set to open higher after heavy losses this week, as investors welcomed news of trade talks between the US and China and a big gain in jobs in the US.

Shortly after the opening bell, the Dow Jones Industrial Average was up 1.3 per cent at 22,986.87. The blue-chip index fell 2.8 per cent on Thursday amid fears of slowing growth.

The broad-based S&P 500 climbed 1.3 per cent to 2,478.96, while the tech-rich Nasdaq Composite Index advanced 1.5 per cent to 6,562.51.

European shares recouped losses from a day earlier, with Germany’s DAX gaining 1.8 per cent to 10,604 and France’s CAC 40 rising 1.3 per cent to 4,672. Britain’s FTSE 100 advanced 1.4 per cent to 6,785.

Most overseas markets rose after China’s Commerce Ministry said trade talks between the US and China will be held Monday and Tuesday in Beijing.

Bond prices dropped as investors turned back to riskier investments. The yield on the 10-year Treasury surged to 2.64 per cent.

“The tide appears to have turned with anticipation for the US-China trade talks commencing next week,” Jingyi Pan of IG said in an interview. “Across Asian markets and US futures, there has been an uplifting effect.

China’s Commerce Ministry said the talks will be held on Monday and Tuesday in Beijing. Officials hope to cool a festering trade dispute that has shaken global financial markets.

“Equity markets have rallied… after some positive news was released from China overnight,” noted David Madden, market analyst at CMC Markets UK.

Meanwhile, China’s central bank moved to stimulate the economy by allowing commercial banks to use more of their funds for lending.

“We’re not expecting a major breakthrough [in trade talks] on January 7-8,” said Edward Park, deputy chief investment officer at Brooks Macdonald.

“That said, where equity markets are in terms of

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