Stocks, emerging market currencies rise on planned U.S.-China trade talks

NEW YORK (Reuters) - U.S. stocks and emerging market currencies rebounded on Thursday after China said it will hold trade talks with the United States this month and Turkey’s lira continued its recovery.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 16, 2018. REUTERS/Brendan McDermid

China said that a delegation led by its vice commerce minister would travel to the United States for talks on Aug. 21 and 22, raising hopes that Beijing and Washington may resolve the escalating tariff war that has roiled financial markets since early March.

The Chinese yuan recovered from its weakest level since January 2017, and the dollar moved slightly lower.

“The news of China coming back to the negotiating table is providing relief and you are starting to see markets stabilize a little bit,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Chicago.

The Turkish lira built upon Wednesday’s gains, when Qatar pledged to invest $15 billion in Turkey. Other emerging market currencies, such as Brazil’s real and Mexico’s peso, also rose.

The Turkish lira TRY= rose 2.9 percent to 5.7941 per dollar.

On Thursday, Turkish Finance Minister Berat Albayrak assured international investors on a conference call that the country would emerge stronger from its currency crisis and that its banks were healthy.

“The trade talks and the back and forth on Turkey is really going to be the stuff everybody’s watching,” said Blake Gwynn, an interest rate strategist at NatWest Markets in Stamford, Connecticut.

Metals prices climbed as well, though MSCI’s index of emerging market stocks dipped after having edged up into positive territory earlier in the day.

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MSCI's index of world stocks .MIWD00000PUS rose 0.6 percent. Emerging market stocks .MSCIEF dipped 0.2 percent a day after falling more than 20 percent from their January intraday high.

In U.S. markets, the Dow Jones Industrial Average .DJI rose 396.32 points, or 1.58 percent, to 25,558.73, the S&P 500 .SPX gained 22.32 points, or 0.79 percent, to 2,840.69 and the Nasdaq Composite .IXIC added 32.41 points, or 0.42 percent, to 7,806.52.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.44 percent.

The Shanghai Composite Index .SSEC closed down 0.6 percent, while Hong Kong's Hang Seng index .HSI ended 0.8 percent lower. Hopes that China and the United States could ease trade tensions helped Chinese stocks pare losses. [.SS]

In currency markets, the dollar index .DXY fell 0.1 percent, while the euro EUR= was up 0.27 percent to $1.1374 after closing Wednesday at its lowest point since July 2017.

The Chinese yuan CNH=EBS gained 1.2 percent to 6.862 per dollar.

Copper CMCU3 rose 1.54 percent to $5,890.50 a tonne, after having confirmed a bear market on Wednesday when it closed 20.9 percent below its recent high reached on June 7.

(For a graphic on 'Emerging market shares savaged by bears' click

Oil also recovered somewhat after Wednesday's slide, though a weakening outlook for crude demand kept prices in check. U.S. crude CLc1 rose 0.72 percent to $65.48 per barrel and Brent LCOc1 was last at $71.33, up 0.81 percent on the day.

U.S. Treasury yields rose on the news of U.S.-China trade talks. Benchmark 10-year notes US10YT=RR last fell 6/32 in price to yield 2.8714 percent, from 2.851 percent late on Wednesday.

Reporting by April Joyner; additional reporting by Sinéad Carew and Karen Brettell in New York, Amy Caren Daniel in Bengaluru and Marc Jones in London; Editing by Dan Grebler, Leslie Adler and Susan Thomas