Wall Street ended Thursday modestly higher as the US and China resumed trade talks, while the rally in sovereign debt eased as investors continued to assess implications of slowing global growth.
The S&P 500, which climbed as much as 0.5 per cent, finished 0.36 per cent higher, led by financials and materials. Utilities, considered a bond proxy were the biggest decliners on the day. The Dow Jones Industrial Average and Nasdaq Composite also carved out similar gains for the day.
The boost to the S&P 500, which remains on track for its best quarter since 2009, came as Robert Lighthizer, the US trade representative, and Steven Mnuchin, the US Treasury secretary, arrived in Beijing for yet another round of talks.
European stocks were a mixed bag. The Stoxx 600 failed to hang on to an earlier advance and closed down 0.1 per cent. Frankfurt’s Xetra Dax 30 pared its gains but managed to eke out a 0.1 per cent gain for the day. London’s FTSE 100 outperformed as sterling weakened, rising 0.6 per cent.
Asian bourses fared little better, with mainland China’s CSI 300 index down 0.4 per cent.
With little action on the equities front, the signals being sent by the government bond market remained the focus for investors. Treasuries slipped with the yield on the US 10-year up 2.4 basis points to 2.396 per cent, having hit a fresh 16-month low of 2.3384 per cent earlier in the session. The equivalent German Bund yield ticked up by 1bp to minus 0.074 per cent, leaving it near a 29-month low it touched during the previous session.
Brent crude fell as much as 1.6 per cent with concern at the outlook for growth and its implications on demand offsetting expectations that Opec looked set to extend its supply cuts at its next meeting in June. However, it reversed the bulk of its losses to settle roughly flat at $67.82 a barrel.
A rebound in the dollar also pressured gold prices. The yellow metal was trading 1.5 per cent lower at $1,290.14 per troy ounce.
The pound was hit — down over 1 per cent to $1.3044 — with the UK’s Brexit politics mired in confusion after parliament voted down a series of alternatives to prime minister Theresa May’s Brexit deal.
The euro was down 0.2 per cent at $1.1224.
