In Brief

FTSE hits nine-month high as Trump and Xi agree to talks

London index joins global rally - but will the market optimism last?

The FTSE 100 has reached its highest level this year after the US and China agreed to restart trade talks over the weekend. It climbed to 7530 during Monday's session, its peak since the end of September.

Thawing relations between Donald Trump and his Chinese counterpart Xi Jinping have eased fears over the escalation of a damaging dispute between the world's two leading economies.

Amid a global stock market rally, Wall Street indexes were also significantly higher, with the S&P 500 hitting an all-time high as it surpassed a previous record set in June.

The Dow Jones Industrial Average rose 0.97%, or 258.15 points higher, to 26,858.11. The Nasdaq jumped 1.67%, or 133.39 points, to 8,139.63 and the S&P 500 gained 0.58% to 2,941.76 - the new intraday record.

“Investors are relieved that Donald Trump and Xi Jinping backed away from a deeper trade war, agreeing to restart negotiations during their meeting at the G20 last week,” says The Guardian.

Scott Brown, chief economist at Raymond James, said: “Any step towards a trade resolution, and it doesn't have to be a lot of progress - just a step, is viewed very positively by markets.

“And investors at this point are trying to focus on the positive in hopes that there will be some trade resolution down the line.”

However, Fawad Razaqzada, Market Analyst at Forex.com, has sounded a note of caution. “If this latest trade optimism fades completely, the focus will turn very quickly to the ailing global economy,” he said. 

“As such, the S&P’s latest breakout to a new all-time high could be brief, especially as some of the positivity regarding trade talks was already priced in.”

CNN is also at pains to try and temper the optimism. “The fragile truce does little to alleviate pressure on a global economy wounded by earlier exchanges of fire that hit manufacturing and trade,” writes Charles Riley.

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