Commercial optimism has lifted world stocks to their highest level in two and a half months by Reuters

By Karin Strohecker

London (Reuters) – Hopes of progress in Sino-US trade talks and stimulus measures by central banks lifted world stocks to a two-and-a-half-month high on Monday, though European gains were held back worries about the outlook for the auto sector.

The all-country MSCI country index rose 0.3%, after Japan closed up 1.8% at its highest level of the year and as the stock index Asians of MSCI grew by almost 1%. The Shanghai Blue Chips jumped 2.7%, reaching their highest level in more than six months.

Trade negotiations between the United States and China will resume this week. US President Donald Trump said it could extend the deadline of March 1. Both sides reported progress at talks last week in Beijing.

The mood was more subdued in Europe, where a pan-European stock index hit a new four-month high, but gains were limited by the auto sector, which was affected by data showing that Chinese car sales fell 16% in January, their seventh consecutive. months of decline.

The auto index, an indicator of the European economy, fell by 0.9%, also fearing that a US Commerce report submitted to President Trump will release high tariffs on imported cars and parts. . German stocks fell 0.3%.

Trump has 90 days to decide whether to follow up on the recommendations.

"The optimism on trade has been strong, but the underlying economic data has been much weaker, so you have to take into account certain factors of sales and attraction incentives, said David Vickers, senior portfolio manager at Russell Investments, adding that attention was now focused on the flash PMI index. data to be released later in the week.

"As the rebound from the December lows fades … the fundamentals are reasserting," added Vickers.

Recent unfavorable economic data series have fueled expectations that the world's most powerful central banks could implement stimulus policies and support markets.

The need for economic stimulus was highlighted by data showing a sharp decline in Singapore's exports and a sharp decline in foreign orders for Japanese equipment.

INVESTMENT SLUGGISH

Beijing has already taken steps to ensure that Chinese banks obtain the largest number of new loans ever in January, with the aim of reviving lazy investments.

E-Mini futures were flat, trade was reduced by vacations in the US markets. The United States and the Nasdaq have touted their eighth consecutive consecutive wins over the US bets and China has reached an agreement resolving their long-running trade war. ()

The minutes of the Federal Reserve's latest monetary policy meeting is due to be released Wednesday and is expected to provide further guidance on the likelihood of a rate hike this year. There is also talk of the bank maintaining a much larger balance sheet than expected.

"Given the diversity of speakers since the January meeting that support" patience, "the Fed's report should reiterate a broadly conciliatory message," said a TD Securities analyst in a statement. note.

The dollar remained stable on the yen at 110.57, after having pulled out of a peak of 111.12 in two months.

The pound sterling is rising after three consecutive weeks of losses as investors wait for the outcome of the Brexit negotiations between Britain and the European Union.

UK Prime Minister Theresa May plans to address all EU leaders and the President of the European Commission to demand changes to her EU withdrawal agreement after another defeat by her own lawmakers the week before last.

All of this left the dollar a little lower at 96.835 on a basket of currencies and far from the peak of 97.368 last week.

In commodity markets, oil prices reached their highest level of the year, thanks to OPEC supply cuts and US sanctions on Iran and Venezuela . futures contracts increased by a quarter percent to $ 66.30.