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GLOBAL MARKETS-Stocks meander on caution over trade talks, dollar gains

Published 15/10/2019, 02:46 am
© Reuters.  GLOBAL MARKETS-Stocks meander on caution over trade talks, dollar gains
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(Adds U.S. market open, changes dateline, previous LONDON)

* China trade data adds to signs of weakness in economy

* Asian stocks gain, European shares fall

By Herbert Lash

NEW YORK, Oct 14 (Reuters) - The U.S. dollar gained on Monday as initial optimism ebbed over a potential U.S.-China trade deal that President Donald Trump outlined last week, but a gauge of global equity markets was little changed as investors sought details.

Oil prices fell more than 3% as scant details about the first phase of a Sino-U.S. trade deal undercut optimism over a thaw in the dispute that has sparked a slowdown in global growth.

A slide in Chinese exports picked up pace in September while imports contracted for a fifth straight month, evidence of further weakness in China's economy as tariffs take their toll. exports fell 3.2% from a year earlier in September, the biggest fall since February, customs data showed.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.05% while the FTSEurofirst 300 index .FTEU3 of leading regional shares fell 0.43%.

Stocks traded near break-even on Wall Street. The Dow Jones Industrial Average .DJI rose 18.71 points, or 0.07%, to 26,835.3. The S&P 500 .SPX lost 1.47 points, or 0.05%, to 2,968.8 and the Nasdaq Composite .IXIC added 2.25 points, or 0.03%, to 8,059.28.

"You're pivoting from what was trade escalation in August and parts of September to trade de-escalation which markets celebrated at the end of last week," said Michael Arone, chief investment strategist at State Street (NYSE:STT) Global Advisors in Boston.

"Now moving forward it's going to be about what exactly has been agreed to?"

The U.S. benchmark S&P 500 ended Friday with its first weekly gain in a month after Trump signaled the two sides had taken the first major step in easing tit-for-tat measures.

Euro zone bond yields fell as caution regarding the trade talks encouraged investors back into fixed income after a hefty sell-off on Friday that sent borrowing costs to 2-1/2 month highs.

Trading in U.S. Treasuries was closed for Columbus Day.

Earlier in Asia, stock markets cheered news of a trade agreement. China's blue-chip CSI300 index .CSI300 gained 1.1% while the Shanghai Composite Index .SSEC rose 1.2%.

Markets in Tokyo were closed.

The greenback, Swiss franc and Japanese yen all weakened as optimism over the trade talks, together with the European Union and Britain restarting Brexit negotiations, encouraged investors into riskier assets.

The dollar index .DXY rose 0.22%, with the euro EUR= down 0.18% at $1.102. The Japanese yen JPY= weakened 0.02% versus the greenback at 108.45 per dollar.

Sterling fell about half a percent to $1.2588 GBP= , retreating from a 15-week high of $1.2708 on Friday, on optimism Britain could reach a deal on Brexit with the European Union.

A Brexit deal was hanging in the balance after diplomats indicated the EU wanted more concessions from Prime Minister Boris Johnson and that a full agreement was unlikely this week. crude LCOc1 dropped $1.67 to $58.84 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 lost $1.47 to $53.23 a barrel.

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