Global stocks mostly pushed higher on Wednesday as investors looked past the latest tit-for-tat tariffs by China and the United States.
US President Donald Trump said he will impose 10 percent levies starting next week on another $200 billion of imports from China, prompting Beijing to target $60 billion of US goods with five to 10 percent taxes.
Beijing rejected Trump’s claim that it was tailoring retaliatory tariffs goods with an eye towards hitting the US president in the upcoming midterm elections, and called on the United States to show ‘respect’ to China.
The developments were a clear escalation in the months-long standoff between the world’s top two economies. However, analysts said the measures were not as painful as they could have been.
‘Now that Washington DC and Beijing have stepped up their tactics, there is a feeling in the markets that a weight has been lifted as we have gotten over a hump,’ said market analyst David Madden at CMC Markets UK.
‘The trade dispute may have taken a turn for the worse, but traders aren’t expecting another escalation in the near-term,’ he said.
Gregori Volokhine, president of Meeschaert Financial Services, also downplayed the impact of the latest round of tariffs, saying they ‘are not going to hurt because orders for Christmas goods have already been delivered.’
Europe’s main markets followed Asian markets higher.
Meanwhile on Wall Street, the Dow finished up 0.6 percent, bolstered by big gains in banks JPMorgan Chase and Goldman Sachs. The Nasdaq finished narrowly negative.
Investors were also tracking a meeting of European leaders in Salzburg, Austria, for a summit to set up the last stretch of talks for a Brexit deal.
EU Council President Donald Tusk opened a crucial summit in the Austrian city of Salzburg with a stark warning that Britain’s position on key issues must be ‘reworked.’
He warned negotiations on Britain’s withdrawal from the European Union were reaching a ‘decisive phase,’ amid fears it could crash out in March next year without a deal.
But as she arrived for the summit, British Prime Minister Theresa May said Brussels must also give ground.
‘If we are going to achieve a successful conclusion then, just as the UK has evolved its position, the EU will need to evolve its position too,’ she said.
‘I am confident that with goodwill and determination we can agree a deal that is right for both parties.’
The pound initially leapt on news that Britain’s annual inflation rate unexpectedly hit a six-month high in August, but it later gave up those gains on the latest snags in the Brexit talks.
Key figures around 2100 GMT
New York – Dow Jones: UP 0.6 percent at 26,e)
New York – S&P 500: UP 0.1 percent at 2,907.95 (close)
New York – Nasdaq: DOWN 0.1 percent at 7,950.04 (close)
London – FTSE 100: UP 0.4 percent at 7,331.12 (close)
Frankfurt – DAX 30: UP 0.5 percent at 12,219.02 (close)
Paris – CAC 40: UP 0.6 percent at 5,393.74 (close)
EURO STOXX 50: UP 0.3 percent at 3,368.56 (close)
Tokyo – Nikkei 225: UP 1.1 percent at 23,672.52 (close)
Hong Kong – Hang Seng: UP 1.2 percent at 27,407.37 (close)  
Shanghai – Composite: UP 1.1 percent at 2,730.85 (close)
Euro/dollar: UP at $1.1675 from $1.1667 at 2100 GMT
Pound/dollar: DOWN at $1.3146 from $1.3148
Dollar/yen: DOWN at 112.26 yen from 112.36 yen
Oil – Brent Crude: UP 37 cents at $79.40 per barrel
Oil – West Texas Intermediate: UP $1.27 at $71.12 per barrel