European Stocks Share Worldwide Optimism Evoked by Sino-U.S. Trade War Relief

On Friday European shares joined a global relief rally after U.S. President Donald Trump fueled hopes that a deal to end a prolonged dispute over trade could be made with China later this month. Fears of a full-blown trade war, rising U.S. bond yields, slowing Chinese growth, political risk in the form of Brexit or Italy’s populist government have all been blamed for last month “red October” during which indexes worldwide sustained some of their worst losses since the 2008 financial crisis.

Markets’ newfound optimism is, however, pushing European shares up over four percent this week, their best performance since December 2016. The pan-European STOXX 600 rose 1,2 %, hitting its highest since Oct. 10. Germany's DAX jumped 1,6 % lifted by the big exporters among its constituents, such as carmaker Volkswagen, or Daimler.

Earlier on Thursday Asian stocks extended gains after comments from U.S. President Donald Trump suggested the door is still open for U.S-China trade talks. Benchmark indexes in China, Hong Kong, South Korea and Japan climbed 2-3 %.

Overnight, U.S. stocks rose to extend gains from the previous two sessions after Trump said he had a "long and very good" conversation with Chinese President Xi Jinping on trade and North Korea, and that the two planned to meet at the upcoming G-20 summit.

European markets ended Thursday's session with mixed results as investors digested encouraging corporate earnings results, and reports of Brexit breakthrough.