Donald Trump said China-US trade talks are going ‘extremely well’ (Brendan Smialowski)

London (AFP) – Europe’s major stock markets ended a lacklustre session mostly steady on Monday, consolidating last week’s bumper gains as investors saw reason for optimism over trade talks.

New York markets were shut for Presidents’ Day, and thin European trading volumes reflected the absence of US investors.

This made for a “relatively quiet start” to what otherwise promises to be a busy trading week, said Lukman Otunuga, research analyst at FXTM, “with stocks in Asia concluding higher and European shares remaining steady amid gradual improved optimism over potential progress in US-China trade negotiations”.

Otunuga attributed the mildly positive market sentiment to the US trade negotiations team reporting back to President Donald Trump that meetings with Chinese officials had been “very productive”.

The analyst cautioned however that “it remains wishful thinking to carry optimism that there will be a major breakthrough with a trade deal”.

“Much of the focus has been on US-China trade talks, and whilst we saw little by way of notable breakthroughs, the tone and willingness to find a solution is certainly improving,” added IG analyst Joshua Mahony.

Frankfurt closed unchanged and Paris posted gains, while London lost ground penalised by a stronger pound that weighs on the profits of British-based multinationals.

– Asia rally –

Earlier Monday, Asian equities had already rallied as investors grew increasingly confident that China and the United States will eventually hammer out a deal to end their long-running trade war.

While talks ended Friday in Beijing with no deal, negotiators shift to Washington this week with Trump saying discussions were going “extremely well” and suggesting he could extend a March 1 truce deadline for an agreement to be reached.

The high-level discussions between the economic superpowers are expected to yield a memorandum of understanding ahead of a meeting between Trump and his Chinese counterpart Xi Jinping to finalise a pact.

The news comes at a crucial time as China’s economy stutters and the global outlook looks less certain, with the US also showing signs of slowing.

European and US stock markets had leapt Friday as positive signs emerged from US-China trade talks aimed at averting an escalation of a tariff war between the world’s top two economies.

– Key figures around 1645 GMT –

London – FTSE 100: DOWN 0.2 percent at 7,219.47 points (close)

Frankfurt – DAX 30: FLAT at 11,299.20 (close)

Paris – CAC 40: UP 0.3 percent at 5,168.54 (close)

EURO STOXX 50: FLAT at 3,244.79

New York – CLOSED for bank holiday

Tokyo – Nikkei 225: UP 1.8 percent at 21,281.85 (close)

Hong Kong – Hang Seng: UP 1.6 percent at 28,347.01 (close)

Shanghai – Composite: UP 2.7 percent at 2,754.36 (close)

Euro/dollar: UP at $1.1309 from $1.1296 at 2200 GMT Friday

Pound/dollar: UP at $1.2929 from $1.2889

Dollar/yen: UP at 110.57 yen from 110.47 yen

Oil – Brent Crude: UP 20 cents at $66.45 per barrel

Oil – West Texas Intermediate: UP 35 cents at $56.33

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