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Global stocks edged higher amid hopes of a rate cut from the US Federal Reserve

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Global stocks edged slightly higher on Thursday after Asian markets ended mixed, but investors’ sentiment improved during European trading. European stocks went into the green, which gave impetus to Wall Street futures, which also recovered after an early loss.

World stock markets, fearful of a slide into recession, have been in a state of flux this week, with worries over Washington’s escalating trade tensions with Beijing and Mexico giving way to hopes that major central banks would provide fresh stimulus in response.

Gloomy US private-sector jobs data on Wednesday bolstered market bets on near-term cuts in Federal Reserve interest rates, and a European Central Bank meeting on Thursday was also expected to take steps to shore up ailing Eurozone growth.

Investors monitored lingering global trade tensions, however, particularly the threat from President Donald Trump to impose a 5% tariff on all Mexican imports, in a political ploy criticized even by members of his own party.

Trump also tweeted that while progress between the two countries had been made on immigration, it is “not nearly enough”. Trump ratcheted up tensions with China on Thursday, telling reporters that tariffs on Chinese goods could be raised by another 300 billion USD if necessary. The president was on his way to France for a D-Day commemoration.

Asian markets recap

Asian stocks were trading mixed this Thursday amid lingering trade tensions. The traders kept a close watch on impending US tariffs on Mexico while trade talks with Beijing remained at a standstill.

In Japan, the blue-chip index Nikkei 225 wiped out earlier gains to finish near flat at 20,774.04 points while the Topix index declined 0.34% to 1,524.91 points. The shares of Hino Motors fell to 5-year lows, declining by 4.82%. The best performers of the session were Rakuten and Softbank Group, rising by 4.66% and 3.16%, respectively, while on the opposite side were JGC Corp and Mitsubishi Motors, declining by 7.3% and 5.67%.

In China, the mainland index Shanghai Composite fell by 1.17% to 2,827.80 points and the Shenzhen Composite was down 2.08% at 1,463.70 points. Taiwan’s benchmark Taiex fell by 0.5% to 10,409.20 points, while Hong Kong’s Hang Seng index was fractionally higher in the final hour of trade.

Shanghai composite

In Australia, S&P ASX 200 grew by 0.39% to 6,383 points, with most sectors gaining. Santos and Carnarvon Petroleum announced the discovery of a major oil and gas resource off the coast of Western Australia. The stocks of Santos rose by 1%, while Carnarvon rallied 3.7%. Bank of Queensland announced Westpac’s outgoing head of consumer banking George Frazis will join on September 5 as managing director and CEO.

European stocks mid-session recap

European stocks shrugged off a weak performance in Asia to post gains on Thursday, with the Stoxx Europe 600 rising 0.67% in early morning trade, as investors gear up for the latest decision from the European Central Bank.

The ECB is predicted to maintain guidance, on the likelihood of more stimulus. ECB President Mario Draghi is expected to comment on several topics including the state of Europe’s economy, trade tensions, and banks in the euro area.

German index DAX 30 ticked up 0.66% to 12,060.02 points at 11:45 GMT. The stocks of carmakers Volkswagen and Daimler are up by 0.5% and 0.2%, while chemical giant BASF edged higher by 0.6%. Technology company SAP and pharmaceutical firm Bayer are into the red, declining by 0.15% and 0.35%, respectively. Financial stocks are the biggest winners today with Deutsche Bank and Commerzbank rising by 0.9% and 2.3%.

DAX 30

French index CAC 40 edged higher by 0.72% to 5,330.04 points at mid-session trading. the shares of Renault sank deep into the red, falling by 6.7%, after Fiat Chrysler pulled its offer for the French carmaker. Its competitor on the local market, Peugeot, is rising by 2.02%.

British blue-chip index FTSE 100 added 33.5 points, or 0.46%, to 7,253.71 points as of 11:45 GMT. The benchmark receives support by double-digit gains for Peppa Pig-maker Entertainment One and Go-Ahead Group, which operates a quarter of London’s local buses and the Southeastern rail franchise, among others.

Wall Street pre-session recap

The US stock index futures rose on Thursday as Wall Street’s rally on hopes of a rate cut from the Federal Reserve looked set to continue.

At around 08:10 a.m. ET, Dow Jones Industrial Average futures indicated a gain of 65 points, while futures for the S&P 500 and Nasdaq also ticked higher.

Advanced Micro Devices contributed to the early gains, climbing more than 2% in the premarket after Morgan Stanley upgraded the chipmaker to equal weight from underweight. The analyst also hiked his price target on AMD to 28 USD per share from 17 USD.

On the data front, weekly jobless claims, revised first-quarter productivity and unit labor cost figures are expected at 8.30 a.m. ET, along with April’s international trade figures.