By Chuck Mikolajczak
NEW YORK (Reuters) - A gauge of global stock markets climbed on Tuesday as signs of a thaw in the U.S.-China trade battle helped investors overlook heightened uncertainty over Brexit and French protests, while oil prices rebounded from a selloff a day earlier.
A report that China is moving to cut import tariffs on American-made cars pushed European stocks higher as auto stocks jumped and the market interpreted this as a sign China is ready to make concessions on trade. Shares of U.S. automaker General Motors
That report came after China's Vice Premier Liu He exchanged views on the next stage of trade talks with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.
Signs of progress in the trade talks helped Wall Street build on Monday's gains, when major U.S. indexes staged a reversal from an early tumble which saw the benchmark S&P 500 hit its lowest level since April. Ten of 11 major S&P sectors were higher on Tuesday, with only the defensive utilities <.SPLRCU> sector in the red.
"This is a garden variety oversold bounce driven by headlines on China tariffs," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
The Dow Jones Industrial Average <.DJI> rose 45.79 points, or 0.19 percent, to 24,469.05, the S&P 500 <.SPX> gained 11.21 points, or 0.42 percent, to 2,648.93 and the Nasdaq Composite <.IXIC> added 47.79 points, or 0.68 percent, to 7,068.31.
Germany's DAX <.GDAXI>, the most China-sensitive market in Europe which entered bear market territory last week, climbed 1.9 percent.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.46 percent and was poised to snap a five-session losing streak which saw the index drop 5.5 percent. The pan-European STOXX 600 index <.STOXX> rose 1.81 percent.
Britain's exit from the European Union, or Brexit, remained an uncertainty for investors, and held sterling near 20-month lows after British Prime Minister Theresa May postponed a vote on her deal. On Tuesday, German leader Angela Merkel ruled out further Brexit negotiations but said efforts were being made to give Britain reassurances.
A spokesman for May said Britain's parliament will vote on whether to approve Prime Minister Theresa May's Brexit deal before Jan. 21.
Sterling > was last trading at $1.2518, down 0.33 percent on the day after hitting a low of 1.25.
After an initial softening, the dollar index <.DXY>, tracking the U.S. currency against six major peers, rose 0.24 percent, with the euro > down 0.33 percent to $1.1317.
European bond markets were focused on France as President Emmanuel Macron announced wage rises for the poorest workers and tax cuts for pensioners, raising concerns over fiscal spending after the government announced concessions aimed at defusing weeks of often-violent protests.
This sent French bond yields > to their highest level over Germany's in 19 months.
Benchmark 10-year U.S. notes > were unchanged in price to yield 2.8556 percent.
Oil prices rebounded strongly after having sunk on Monday, buoyed by an outage that dented Libyan production.
U.S. crude
(Additional reporting by Medha Singh in Bengaluru; Editing by Bernadette Baum)
Disclaimer: No Business Standard Journalist was involved in creation of this content
