Global stock markets diverge amid trade hopes

Analysts said that market sentiment has calmed since Trump dialled down pressure on Federal Reserve boss Jerome Powell and hinted at progress in trade talks with economic partners.

London: Global stocks markets diverged on Monday as investors welcomed the absence of further trade war escalation over the weekend and as countries seek to temper US President Donald Trump’s tariffs.

While that was enough to help most Asian and European equities markets rise, investors on Wall Street took some money off the table ahead of upcoming corporate earnings reports and key economic data.

“A weekend light on drama was just what the doctor ordered for financial markets,” said AJ Bell investment director Russ Mould.

Analysts said that market sentiment has calmed since Trump dialled down pressure on Federal Reserve boss Jerome Powell and hinted at progress in trade talks with economic partners.

“While last week’s market action and today’s early session suggest calmer waters, any sense of security is precarious,” said City Index and FOREX.com analyst Fawad Razaqzada.

“Underneath the surface, key risks persist − trade tensions, recession worries, and monetary policy uncertainties are very much alive.” Investors will have plenty of corporate earnings and economic data to command their attention.

“This week will be the first for a while where data and earnings will compete with tariff headlines,” said Jim Reid, global head of macro research at Deutsche Bank.

US giants Amazon, Apple, Meta and Microsoft all report their first quarter earnings this week, with investors looking to assess the impact of tariffs on businesses.

Eyes will also be on the release of several closely-watched US economic indicators which “may either dampen or revive concerns about recession in the world’s largest economy,” Mould added.

Crude prices fell as investors worried about the impact of the trade war on the US economy.

Bjarne Schieldrop said oil demand is “at risk as US consumers soon will face hard tariff realities”.

Analysts are concerned that the punitive tariff levels that the US and Chinese government have imposed could lead to shortages of certain goods.

US Treasury Secretary Scott Bessent said Monday he was not concerned “at present” about American stores potentially running out of items due to Trump’s tariffs.

Traders are hoping governments can hammer out deals with Trump to soften the impact of his sweeping tariffs, with reports last week saying China was considering exempting some US goods from its hefty retaliatory measures.

Beijing has said there are no active negotiations between the economic superpowers and on Monday an official denied Trump’s claims to have spoken with Xi by phone.

In Beijing, senior economic planner Zhao Chenxin said China was on the “right side of history” in its gruelling trade war with the United States.

Japanese media reported that a second round of trade talks in Washington was set for Thursday.

The discussions will be closely watched as a barometer for efforts by other countries seeking tariff relief.

Bessent said earlier a trade “understanding” between South Korea and the United States could be reached by this week.

Copper prices steadied on Monday as the market waited for further developments on U.S.-China trade relations and for clues to demand prospects in China, where growth is under pressure from US import tariffs.

Benchmark copper on the London Metal Exchange (LME) was little changed at $9,369 a metric tone in official rings.

US President Donald Trump insists there has been progress with China, and that he has spoken with President Xi Jinping. However, Beijing has denied trade talks are occurring, and on Sunday, Treasury Secretary Scott Bessent did not say that tariff talks were underway.

“The impact of tariffs on China - the biggest consumer of metals - is particularly in focus for metals markets,” said ING commodities analyst Ewa Manthey.

“With growth in the US likely to slow, thanks to tariffs, and China already struggling to revive its economy, demand for copper and other industrial metals is likely to weaken.” Analysts say further measures by Chinese authorities to support growth and demand could limit downside for copper, used widely in the power and construction industries.

China has advanced this year’s stimulus plans but is holding off on fresh measures as it tries to maintain composure, betting on Washington blinking first in a protracted trade war.

Support for copper prices comes from a massive drop in inventories of the metal in warehouses monitored by Shanghai Futures Exchange (SHFE), which dropped 32% last week to 116,753 tonnes from the previous week.

The drop in SHFE copper stocks is a result of some Chinese copper consumers turning to refined copper because of tight scrap supplies.

On the technical front, strong support for copper comes at the 100- and 200-day moving averages at around $9,305 and $9,320, respectively.

Industrial metal markets are waiting for surveys of purchasing managers in China’s manufacturing sector, due later this week, which is expected to show shrinking activity in April.

In other metals, aluminium was up 0.1% at $2,431.5 a tone, zinc slipped 0.3% to $2,638.5, lead rose 1.5% to $1,974, tin firmed 0.5% at $32,125 and nickel was up 0.7% at $15,650 a tone.

Reuters