While markets have got off to a strong start in 2019, there are warnings that the rally will not likely last all year (Daniel ROLAND)

London (AFP) – European stock markets advanced Friday, as investors cautiously awaited news from US-China trade talks in Washington, dealers said.

Nearing the half-way point, London’s benchmark FTSE 100 shares index rose by half a percent, while the Frankfurt DAX 30 and the Paris CAC 40 gained 0.6 percent and 0.3 percent respectively.

Asian indices mostly increased, despite losses on Wall Street, as US economic concerns were eclipsed by hopes that high-level talks between the United States and China would seal a trade war truce.

However, many investors held fire for the moment, though some reports suggest the two are heading towards an eventual deal.

“Global equities saw some modest gains… as investors await results from the Sino-US trade talks,” noted Oanda analyst Dean Popplewell.

“Will we get some concrete news or perhaps an announcement of an extension of the March 1 deadline for implementing further US tariffs?”

And with the March deadline approaching, US President Donald Trump will meet with China’s top negotiator and Xi Jinping’s top economics envoy, Liu He, on Friday.

– No ‘meaningful’ deal? –

The Economist Intelligence Unit (EIU) meanwhile forecast that the two sides will make “some progress” — but will unlikely clinch a “meaningful” deal. 

“The likelihood that the US and China will make some progress in the ongoing trade talks has increased as a result of mounting domestic pressure in both economies,” noted EIU global economist Cailin Birch in a report.

“Nonetheless, we do not expect a meaningful agreement, as the US and China enter into a strategic competition for economic — and particularly technological — dominance.”

The EIU added that, in its view, any deal would therefore only provide “temporary relief” from trade tensions.

The lack of information on the crunch talks led dealers in New York to take their cue from figures showing home sales at a three-year low, while sales of durable goods missed expectations.

All three main indices on Wall Street finished in the red on Thursday.

On currency markets, the dollar held gains against most other currencies as the soft US data sparked a shift by investors towards the safer option, while the pound remains under pressure from ongoing Brexit uncertainty.

– Key figures around 1200 GMT – 

London – FTSE 100: UP 0.5 percent at 7,202.34 points

Frankfurt – DAX 30: UP 0.6 percent at 11,486.88

Paris – CAC 40: UP 0.3 percent at 5,211.31

EURO STOXX 50: UP 0.3 percent at 3,273.04

Tokyo – Nikkei 225: DOWN 0.2 percent at 21,425.51 (close)

Hong Kong – Hang Seng: UP 0.7 percent at 28,816.30 (close)

Shanghai – Composite: UP 1.9 percent at 2,804.23 (close)

New York – Dow: DOWN 0.4 percent at 25,850.63 (close)

Euro/dollar: UP at $1.1339 from $1.1336 at 2200 GMT

Pound/dollar: DOWN at $1.3018 from $1.3043

Euro/pound: UP at 87.11 pence from 86.92 pence

Dollar/yen: UP at 110.87 yen from 110.70 yen

Oil – Brent Crude: UP 42 cents at $67.49 per barrel

Oil – West Texas Intermediate: UP 30 cents at $57.26

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