World shares rise after US drops planned tariffs on Mexico

A currency trader works at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Monday, June 10, 2019. Asian financial markets advanced on Monday after China released better-than-expected trade data for May. Gains were reined in by worries over where the world’s two largest economies stood on trade negotiations. (AP Photo/Ahn Young-joon)

SINGAPORE (AP) — Global stocks rose Monday after U.S. President Donald Trump suspended plans to impose tariffs on Mexico as the countries inked a deal on immigration. But broader concerns remain over global growth and a trade dispute between the United States and China that shows no sign of easing.

After U.S. markets closed on Friday, Trump tweeted that Mexico “has agreed to take strong measures” to stem the flow of migrants from Central America into the United States. He added that 5% tariffs on imports from Mexico, meant to take effect Monday, were “indefinitely suspended.”

The tariffs would have added to costs for American manufacturers and consumers.

The agreement with Mexico “appears to be a lower hanging fruit for the Trump administration,” Jingyi Pan of IG said in a commentary. “The U.S.-China trade conflict meanwhile reckoned to remain an ongoing concern that looks have been caught in stalemate,” she added.

After strong gains in Asia, which were helped by upbeat Chinese data, European indexes were up more modestly. France’s CAC 40 climbed 0.3% to 5,377 and the FTSE 100 index in Britain gained 0.5% to 7,365. German markets were closed for a holiday.

Wall Street appeared set to build on gains from last week, which was its best since late November. The S&P 500 futures contract picked up 0.3% to 2,884. Dow Jones Industrial Average futures edged 0.4% higher to 26,099.

Over the weekend, financial leaders of the Group of 20 major economies met in Fukuoka, Japan, and pledged to protect global growth. They said in a joint statement that risks from trade and geopolitical tensions were “intensifying.”

The statement didn’t single out the tariffs battle between the U.S. and China, but leaders signaled separately that it was the No. 1 concern.

U.S. Treasury Secretary Steven Mnuchin met China’s central bank governor, Yi Gang, on the sidelines of the gathering on Sunday. The two countries have concluded 11 rounds of trade talks with no agreement.

Mnuchin said on Twitter that the meeting was constructive and they had a “candid discussion on trade issues.” He did not give further details.

Gains in Asia’s stock markets were boosted by better-than-expected Chinese trade data on Monday. The country’s trade surplus surged 78% to $41.7 billion in May as its imports slipped and exports unexpectedly climbed.

Investors had expected both indicators to shrink with softening external conditions. Instead, China’s customs agency said its exports grew 1.1% in May from a year earlier, trouncing expectations of a 3.8% decline by analysts polled by FactSet.

Reopening after a market holiday, Hong Kong’s Hang Seng picked up 2.3% to 27,578.64 and the Shanghai Composite index was 0.9% higher at 2,852.13. Japan’s Nikkei 225 advanced 1.2% to 21,134.42, while the Kospi in South Korea rose 1.3% to 2,099.49. Shares rose in Taiwan and throughout Southeast Asia. Markets in Australia were closed.

In energy markets, the benchmark U.S. crude contract gained 5 cents to $54.04 per barrel. The contract advanced $1.40 to $53.99 per barrel on Friday. Brent crude oil, the international standard, lost 13 cents to $63.16 a barrel. It added $1.62 to $63.29 per barrel in the previous session.

The dollar, meanwhile, rose to 108.60 Japanese yen from 108.17 yen late Friday, while the euro retreated to $1.1307 from $1.1335.

___

Ott reported from Madrid.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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