BANGKOK (AP) — Global markets were boosted Thursday by news that Britain and the European have agreed on an outline Brexit deal after days of intense negotiations.
Benchmarks in London and Frankfurt rallied and Wall Street was positioned for gains when the market opens in New York.
Although news of a Brexit breakthrough had investors optimistic, the deal must still be formally approved by the bloc and ratified by the European and U.K. Parliaments.
Further complicating matters was British Prime Minister Boris Johnson’s Northern Irish government allies, who immediately said they could not back the outline deal because of provisions for the Irish border.
“Anyone hoping that the process will be straightforward now is kidding themselves,” said Craig Erlam, market analyst for OANDA. “Nothing in Brexit is ever simple.”
U.K. lawmakers will convene in a special session Saturday to vote on the deal.
In midday trading, the FTSE 100 in London added 0.5% to 7,202 and the British pound rose to its highest point against the dollar in five months.
Germany’s DAX rose nearly 0.4% to 12,713, while in Paris, the CAC 40 edged 0.1% higher.
Wall Street futures also headed higher, with the contract for the S&P 500 up 0.4% to breach the 3,000 mark. The same measure for the Dow Jones Industrial Average also gained 0.4%, to 27,036.
Hong Kong led gains in Asia after its chief executive, Carrie Lam, announced help for the property sector. The semi-autonomous city’s economy has been languishing amid months of increasingly violent political protests that are in part fueled by the sky-high cost of housing.
The Hang Seng index added 0.7% to 26,848.49, but elsewhere sentiment was tepid. Tokyo’s Nikkei 225 index lost 0.1% to 22,451.86 while the Shanghai Composite index slipped 0.1% to 2,977.33.
Australia’s S&P ASX 200 lost 0.8% to 6,684.70 and the Kospi in Seoul gave up 0.2% to 2,077.94. India’s Sensex jumped 0.9% to 38,968.58.
Investors are also eyeing more earnings Thursday as they await the release of Chinese data on Friday that will likely show the world’s second largest economy slowed further in the July-September quarter given the toll the trade dispute is taking on the export manufacturing sector.
A move on Tuesday by the U.S. House of Representatives to show support for pro-democracy protests in Hong Kong appeared to dim some investor optimism about the prospects for progress in the latest trade talks between the U.S. and China.
On Friday, the U.S. agreed to suspend a planned hike in tariffs on $250 billion of Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed to buy $40 billion to $50 billion in U.S. farm products.
But in a White House news conference on Wednesday, U.S. Treasury Secretary Steven Mnuchin told reporters that officials were still ironing out details of their preliminary agreement.
President Donald Trump has said he does not expect to sign an agreement until next month, when he is due to meet with Chinese President Xi Jinping at the regional Asian Economic Cooperation, or APEC, forum in Chile in November.
In other trading, benchmark crude oil lost 40 cents to $52.96 per barrel in electronic trading on the New York Mercantile Exchange. It rose 55 cents to settle at $53.36 a barrel on Wednesday. Brent crude oil, the international standard, also lost 40 cents to $59.02 a barrel.
The dollar was flat at 108.76 Japanese yen. The euro strengthened to $1.1122 from $1.1073 and the pound briefly rose above $1.30 briefly before settling at $1.2874.
Ott reported from Washington.