UKX FTSE 100 Index

By David Hodari 

Global stocks gained Wednesday on a fresh wave of trade optimism, shrugging off a leadership challenge against U.K. Prime Minister Theresa May.

Stocks in Europe opened higher, with the pan-continental Stoxx Europe 600 index up 0.5% in the day's opening minutes, while the British pound edged up 0.5% but remained near its lowest level in 20 months.

The yield on U.K. 10-year government bonds was last 1.20%, having ticked up from 1.18% late Tuesday. Yields rise as prices fall. The U.K.'s FTSE 100 index was last up 0.4%, broadly in line with mild gains elsewhere in Europe, while the FTSE 250 was up 0.1%.

Lawmakers in the U.K.'s ruling Conservative party took the steps to initiate a no-confidence vote against embattled Prime Minister Theresa May. Mrs. May on Monday had postponed a parliamentary vote on her Brexit bill, which prompted a new volley of criticism over her handling of the country's exit from the European Union.

Global trading remained broadly upbeat, with U.S. futures putting the S&P 500 and the Dow Jones Industrial Average on course to rise 0.4% at the open.

Rises in Europe echoed gains in Asia-Pacific, where the Nikkei climbed 2.2% and Hong Kong's Hang Seng Index rose 1.6% as signs of a further softening in trade tensions revived risk appetite. Taiwanese and South Korean benchmarks both increased more than 1%.

Details continued to emerge from the first trade talks between Washington and Beijing, with China agreeing to reduce auto tariffs and boost purchases of soybeans and other crops.

The warming U.S.-China trade relations prompted cautious optimism among some investors.

"Global trade is one of the most important issues for markets going into 2019," said Viktor Hjort, global head of credit strategy at BNP Paribas. "The positive angle is that U.S. and Chinese negotiators appear to be making an effort, but I think at this point, any absence of bad news is good news."

President Trump said in an interview with Reuters he would intervene in the Justice Department's case against Huawei Chief Financial Officer Meng Wanzhou if it would help smooth a trade deal with China.

The Chinese yuan was last up 0.2% against the U.S. dollar. Meanwhile, the WSJ Dollar Index was last down 0.1%, its five-day gains eroded to 0.5%.

U.S. investors were also keeping an eye out for inflation data, due out later in the day.

Elsewhere in Europe, investors were monitoring the reaction to French President Emmanuel Macron's decision to cut taxes in the wake of protests. The move may test the European Union's budgetary rules and embolden other members, such as Italy, to do the same.

In commodities, Brent crude oil prices were last up 0.65% at $60.59 a barrel, while gold was up 0.2% at $1,249.30 a troy ounce.

Write to David Hodari at David.Hodari@wsj.com

(END) Dow Jones Newswires

December 12, 2018 04:28 ET (09:28 GMT)

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