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GLOBAL MARKETS-Shares resume gains, pound waits on Supreme Court ruling

Published 24/09/2019, 07:28 pm
© Reuters.  GLOBAL MARKETS-Shares resume gains, pound waits on Supreme Court ruling
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* Europe, S&P500 futures gain after Mnuchin confirms trade talks

* Euro zone data weigh on euro, deepen anxiety about economy

* Sterling waits for Supreme Court ruling on parliament suspension

By Marc Jones

LONDON, Sept 24 (Reuters) - European shares rose on Tuesday, following their worst day in over a month, after Washington said the United States and China would resume trade talks. Britain's pound was laying low before the next act in the Brexit drama.

There was more gloomy data from Germany to contend with, but U.S. Treasury Secretary Steven Mnuchin's confirmation that he and Trade Representative Robert Lighthizer would meet Chinese Vice Premier Liu He in two weeks' time was keeping up spirits. pan-European STOXX 600 index .STOXX rose 0.3%, with the eurozone banking index .SX7E up 0.6% after it had slumped 2.8% in the previous session. .EU Germany's bond yields were also a touch higher after Monday's dour PMI data had triggered their biggest fall since June. GVD/EUR

"A perceived lull in U.S.-China trade tensions has eased market fears about an economic downturn," a group of BlackRock's investment strategists wrote in a note.

Currency market moves were mostly small-scale. The dollar rose the euro wobbled around $1.0990 EUR= after falling below a key support of about $1.10.

Sterling also slipped, to $1.2423 GBP=D4 , as traders waited a ruling from Britain's Supreme Court on Prime Minister Boris Johnson's suspension of parliament this month. The decision is due at 0930 GMT.

"In the case of the law interpretation agreeing with the government, markets may perceive PM Johnson's negotiation position with the EU as having been strengthened as the probability of a no-deal Brexit may look higher, Morgan Stanley's Hans Redeker said.

"Sterling may initially weaken, but markets could then focus on the possibility that the EU could become more flexible on the Irish backstop. In this scenario, GBP would turn into a 'buy the dip' story."

GOOD TO TALK

MSCI's broadest regional Asia share index .MIAP00000PUS inched up 0.1%, led by 0.6% gains in mainland Chinese shares .CSI300 after the vice head of China's state planner said Beijing will step up efforts to stabilise growth. Nikkei .N225 ended up 0.2% after a market holiday on Monday. Wall Street looked on track for modest gains, with S&P futures ESc1 up 0.25%. yen traded at 107.62 yen per dollar JPY= , after reaching two-week highs of 107.32 the previous day.

"The comments (from Mnuchin on China trade talks) gave a little bit of boost to sentiment, but markets are still not that optimistic, either," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

"It seems there have been a lot going on behind the scenes," he said, referring to U.S. President Donald Trump's questioning a decision by his top trade negotiators to ask Chinese officials to delay a planned trip to U.S. farming regions. cancellation was seen by markets as a sign all is not well in the U.S.-China talks and had helped send share prices lower on Friday.

Among the main commodities, oil prices dipped on expectations of subdued demand although uncertainty remained about whether Saudi Arabia would be able to fully restore output after recent attacks on its oil facilities.

Brent crude futures LCOc1 fell 40 cents to $64.37 a barrel by 0624 GMT. West Texas Intermediate futures CLc1 were down 33 cents to $58.31.

"The demand side of the equation is back in focus," said Michael McCarthy, senior market analyst at CMC Markets in Sydney, pointing to sluggish manufacturing numbers in leading economies in Europe as well as Japan.

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