Pound gains as May survives vote, global stocks advance

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New York (AFP) – The British pound rose Wednesday as British Prime Minister Theresa May survived a no-confidence vote in parliament while global stocks rallied on improved hopes for the US-China trade talks.

May won the support of 200 Conservative lawmakers, but 117 voted to oust her. And she only survived after conceding she would step down before the 2022 election.

The pound rallied ahead of the vote and stood at $1.2629 soon after the result was announced. That’s a gain of 1.1 percent from Tuesday, but below the peak value earlier in the session amid expectations May would garner a more sweeping win.

The “victory has increased her authority within her party slightly, but it does nothing to change the arithmetic in parliament which ultimately will determine the outcome of Brexit,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

“The rebellion … was within the 100-to-120 range widely expected beforehand, hence the negligible market reaction to the news.”

European bourses rose in anticipation of the outcome in a rally also bolstered by better headlines surrounding the US-China trade talks.

Paris fizzed 2.2 percent higher, Frankfurt gained 1.4 percent and London won 1.1 percent. Shares in Milan rose 1.9, supported as well by media reports that Italy could propose a new budget with less of a deficit to ease its dispute with the EU.

Wall Street advanced, with the Dow finishing up 0.6 percent.

– US-China deal? –

Unlike the last two sessions, there were no major gyrations lower on Wednesday. But stocks still finished well below their session highs, with the Dow falling about 300 points from its peak in the last three hours of trading.

The latest indicators have been more upbeat on the state of play between Beijing and Washington, with a Chinese Huawei executive granted bail by a Canadian court in a closely-watched legal case, and confirmation from Commerce Secretary Wilbur Ross that Beijing offered to cut tariffs on US autos and resume soybean imports.

“The fading action was in keeping with a trend of selling into strength and likely reflected some nervousness about holding positions overnight given the headline-induced volatility of late,” said Briefing.com.

VTB Capital analyst Neil MacKinnon said, “News flow regarding developments in the US-China trade dispute has been notoriously erratic and positive news can quickly give way to negative news.”

– Key figures around 2130 GMT –

New York – Dow Jones: UP 0.6 percent at 24,527.27 (close)

New York – S&P 500: UP 0.5 percent at 2,651.07 (close)

New York – Nasdaq: UP 1.0 percent at 7,098.31 (close)

London – FTSE 100: UP 1.1 percent at 6,880.19 (close)

Frankfurt – DAX 30: UP 1.4 percent at 10,929.43 (close)

Paris – CAC 40: UP 2.2 percent at 4,909.45 (close)

EURO STOXX 50: UP 1.7 percent at 3,107.97 (close)

Tokyo – Nikkei 225: UP 2.2 percent at 21,602.75 (close)

Hong Kong – Hang Seng: UP 1.6 percent at 26,186.71 (close)

Shanghai – Composite: UP 0.3 percent at 2,602.15 (close)

Pound/dollar: UP at $1.2629 from $1.2487 at 2200 GMT

Euro/dollar: UP at $1.1365 from $1.1317

Dollar/yen: DOWN at 113.22 yen from 113.38

Oil – Brent Crude: DOWN 5 cents at $60.15 per barrel

Oil – West Texas Intermediate DOWN 50 cents at $51.15 per barrel

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