* British PM May announces resignation, pound bounce fades
* European equities gain around 0.8%
* Trump: 'Dangerous' Huawei could be in China trade deal
* Dollar off 2-year highs; 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 bounced after comments by President Donald
Trump encouraged hopes of progress in U.S.-China trade talks
while British Prime Minister Theresa May's resignation briefly
sent sterling fluctuating wildly.
Persisting concerns over the health of the world economy
linked to trade tensions have hit global markets this week, with
the MSCI All Country index .MIWD00000PUS in line for a more
than 1% fall in its third week in the red. That will mark its
longest losing streak since a rout in December.
The index gained 0.2% on Friday following the overnight
comments from Trump, who said issues with China's Huawei
Technologies Co Ltd HWT.UL might be resolved within the
framework of a broader trade deal. However, no high-level talks
have been scheduled and Trump also labelled the
telecommunications company "very dangerous" With flight-to-safety plays remaining dominant, 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 0.8
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.
With safe-haven assets in demand, the benchmark 10-year U.S.
Treasury note US10YT=RR yield hit 2.292% overnight, the lowest
level since mid-October 2017. The yield last stood at 2.3220%.
"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.
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. "The fear now is that the economic recovery from the poor
second half of 2018 may be dying before it even emerges," said
Peter Schaffrik, global macro strategist at RBC Capital Markets.
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. PREMIERSHIP ENDS IN JUNE
In Britain, May announcing her resignation send the pound on
a rollercoaster ride. It popped up nearly half a percent against
the dollar after the announcement but the gains were short lived
and it subsequently traded back at $1.2672 GBP=D4 , and not far
off the day's lows versus the euro.
May is likely to be succeeded by a Eurosceptic leader,
potentially increasing chances of a no-deal Brexit. On Thursday, the pound had suffered its 14th consecutive day
of losses against the euro, its longest losing streak on record.
EURGBP=
Elsewhere on currency markets, the dollar index .DXY that
measures it against six major rivals had hit a high of 98.371 on
Thursday U.S. time. It was last quoted a touch weaker at 97.814.
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 $1.1182 EUR= on Friday.
Other major currencies were relatively calm. The dollar was
holding at 109.59 yen JPY= , flat on the day.
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 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.
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