* European equities gain around 1%
* Trump: 'Dangerous' Huawei could be in China trade deal
* Sterling firms, dollar off 2-year highs; some respite for
oil
* World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Karin Strohecker
LONDON, May 24 (Reuters) - World stocks edged higher on
Friday and oil prices recovered from bruising falls, after U.S.
President Donald Trump nurtured muted hopes of progress in
U.S.-China talks while concerns over trade and the health of the
world economy persisted.
Trade tensions have roiled global markets this week with the
MSCI All Country index .MIWD00000PUS up 0.2% on the day but in
line for a more than 1% fall in its third week in the red, their
longest losing streak since a rout in December.
In overnight comments, Trump also labelled Chinese
telecommunications giant Huawei Technologies Co Ltd HWT.UL
"very dangerous" while adding issues with the firm might be
resolved within the framework of a broader trade deal, though no
high-level talks have been scheduled. Asian bourses were torn between fears of a more protracted
U.S.-China trade war and hopes the world's two largest economies
would reach a deal soon. China mainland blue chips .CSI300 and
Hong Kong .HSI stocks climbed around 0.3% while Japan's Nikkei
.N225 fell 0.2%. .SS
European stock markets were more upbeat. The pan-regional
Euro Stoxx 600 index .STOXX , Germany's DAX .GDAXI , France's
CAC .FCHI and Britain's FTSE 100 .FTSE all rose around 1
percent. .EU .L
"It might be a step too far that there is optimism over a
trade deal but there may be a little more optimism over the way
talks are going," Investec chief economist Philip Shaw said.
Wall Street also looked in line for a reprieve after major
indexes .DJI .IXIC tumbled more than 1% on Thursday as dire
economic data exacerbated trade war fears .N . S&P 500 e-minis
ESc1 pointed to a 0.6% rise at the open.
Flight-to-safety plays continued to dominated global markets
with the benchmark 10-year U.S. Treasury note US10YT=RR yield
hitting 2.292% overnight, the lowest level since mid-October
2017. The yield last stood at 2.3220%.
Key parts of the U.S. yield curve were inverted, flashing
another warning sign about the health of the world's biggest
economy.
U.S. manufacturing growth sputtered in May, data showed on
Thursday, measuring its weakest pace of activity in nearly a
decade, while new orders fell for the first time since August
2009. "Fixed income safe-haven sovereign markets are the asset of
choice at the moment, and although we had a recovery in European
stock markets this morning, there has not been much of a
retracement at all in (German) bunds or (British) gilts," Shaw
said.
Washington last week effectively banned U.S. firms from
doing business with Huawei, the world's largest networking gear
maker, citing national security concerns.
The U.S. Commerce Department said on Thursday it was
proposing a new rule to impose anti-subsidy duties on products
from countries that undervalue their currencies, in another move
that could penalise Chinese products. China's Foreign Ministry on Friday denounced Washington's
comments on Huawei.
Among currencies, the dollar index .DXY that measures it
against six major rivals hit a high of 98.371 on Thursday U.S.
time. It was last quoted a touch weaker at 97.789.
The euro, which on Thursday slumped to levels last seen in
May 2017 as a recovery in euro zone business activity was weaker
than expected, traded at $1.1191 EUR= on Friday.
Sterling strengthened a quarter of a percent after softening
nine out of the previous 10 sessions against the dollar amid
mounting pressure on Prime Minister Theresa May to name a date
for her departure after a backlash over her plans for Britain's
exit from the European Union. The pound traded at $1.2687 GBP=D4 . Sterling suffered its
14th consecutive day of losses against the euro on Thursday, its
longest losing streak on record. It stood at 0.8818 to the euro
EURGBP= .
Other major currencies were relatively calm. The dollar was
holding at 109.59 yen JPY= , flat on the day.
In commodity markets, oil prices gained amid OPEC supply
cuts and tensions in the Middle East. Crude futures tumbled on
Thursday as trade tensions dampened the demand outlook, with the
crude benchmarks posting their biggest daily falls in six
months. O/R
U.S. crude CLc1 was at $58.7 a barrel, up 1.4%, after
Thursday's 5.7% fall that took it to the lowest in two months.
Brent crude LCOc1 futures rebounded 1.3% to $68.65 per barrel,
after falling 4.6% in the previous session.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
MSCI World Asia as of May 24 2019 https://tmsnrt.rs/2YLviNL
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>