Volkswacht Bodensee - Stock markets rise as China-US trade fears ease

Tokyo stocks surged more than three percent to a record after Japan's ruling party said it was set to sign a new coalition deal.

The deal, signed on Monday, paves the way for Sanae Takaichi to become prime minister, raising hopes for an end to the country's political turmoil.

Most markets started the week on the front foot with "fears around the US-China trade spat abating for the time being", said Joshua Mahony, chief market analyst at Scope Markets.

A global outage that hit Amazon's cloud services for several hours on Monday, affecting numerous online services for the US tech giant and numerous other companies and organisations, appeared to have settled down ahead of Wall Street's reopening.

In Europe, Frankfurt's stock market rose more than one percent and London edged higher nearing the half-way mark.

Paris was a rare faller, with banking stocks slumping after a US court late last week found BNP Paribas liable for atrocities committed in Sudan.

BNP tumbled around eight percent, while Credit Agricole and Societe Generale both fell more than one percent.

French bonds declined after S&P Global cut the country’s credit rating, citing risks that the government would fail to significantly reduce its deficit next year.

The bourse got a slight lift from Gucci-owner Kering, which rose more than three percent after it announced the $4.6-billion sale of its beauty products division to L'Oreal.

Hong Kong advanced more than two percent and Shanghai was also well up as data showed China's economy grew in line with expectations in the third quarter, though at its slowest pace in a year.

The data was released just hours before the start of a closely watched four-day meeting in Beijing with top Communist Party officials focused on long-term economic planning.

Sentiment was boosted as Washington and Beijing agreed on Saturday to hold another round of trade negotiations in the coming week, as the world's two biggest economies seek to avoid another damaging tit-for-tat tariff battle.

Trump, who recently threatened 100-percent tariffs in response to Chinese rare-earth export controls, told Fox Business last week that the higher tariffs were "not sustainable".

"Catalysed by Trump's remark... markets appear priced for a positive or at least less-bad outcome," said Chris Weston at Pepperstone.

"The market's base case now seems to be that China will offer concessions on its rare-earth export controls, paving the way for the US to extend the current 30 percent 'tariff truce' by another 90 days beyond its 10 November deadline."

Traders also took heart from a bounceback for US regional bank stocks Friday, which had been pummelled Thursday following disclosures from two mid-sized players of expected losses tied to problem loans.

All three main Wall Street indices ended last week higher.

- Key figures at around 1100 GMT -

London - FTSE 100: UP 0.4 percent at 9,387.00 points

Paris - CAC 40: DOWN 0.1 percent at 8,166.74

Frankfurt - DAX: UP 1.1 percent at 24,094.83

Tokyo - Nikkei 225: UP 3.4 percent at 49,185.50 (close)

Hong Kong - Hang Seng Index: UP 2.4 percent at 25,858.83 (close)

Shanghai - Composite: UP 0.6 percent at 3,863.89 (close)

New York - Dow: UP 0.5 percent at 46,190.61 (Friday close)

Euro/dollar: DOWN at $1.1651 from $1.1670 on Friday

Pound/dollar: DOWN at $1.3409 from $1.3433

Dollar/yen: UP at 150.70 yen from 150.50 yen

Euro/pound: UP at 86.89 percent from 86.88 pence

West Texas Intermediate: DOWN 0.8 percent at $56.69 per barrel

Brent North Sea Crude: DOWN 0.7 percent at $60.86 per barrel

T.Zimmermann--VB