World stocks came off six-week lows and U.S. stock futures jumped on Monday on optimism that the United States and China are set to begin negotiations on trade, easing fears about a trade war between the world's two largest economies.
MSCI's world equity index, which tracks shares in 47 countries, touched its lowest level since Feb. 9 but was then buoyed to a 0.25 percent gain after a Wall Street Journal report that Treasury Secretary Mnuchin was considering a visit to Beijing to begin negotiations.
Exemptions on steel/aluminium tariffs have already been granted for other important trade partners (Canada, Mexico, EU), which suggests the U.S. president is using this approach more for negotiating leverage rather than any real intention to start a global trade war, wrote Mike van Dulken, head of research at Accendo Markets, noting a measured and nuanced response from China so far.
Most European stock indices also strengthened, with the pan-European STOXX 600 benchmark up nearly half a percent and the export-sensitive German DAX up 0.6 percent.
Japan's Nikkei, meanwhile, erased earlier losses of 1.3 percent to end 0.7 percent higher.
Fears of a trade war mounted this month after Trump first slapped tariffs on steel and aluminum imports, and then on Thursday specifically targeted China by announcing plans for tariffs on up to $60 billion of Chinese goods.
Signs of potential compromises were also supported by news overnight that South Korea would be exempt from U.S. steel tariffs in a revision of the bilateral trade pact between the two countries.
Source: Radio Pakistan