Stocks Push Higher As Trump Says Trade Deal 'Close'

Global stock markets rallied on Thursday, with Wall Street in record territory, after President Donald Trump said that a trade deal with China was close, emboldening investors to take fresh positions.

The British pound, meanwhile, dipped as Britons voted in a general election that seeks to determine the future of Brexit.

"Getting VERY close to a BIG DEAL with China. They want it, and so do we!" Trump tweeted.

The world's top two economies have been locked in a trade war with negotiators working to reach at least a partial resolution -- called a phase-one deal -- before Washington is scheduled to increase tariffs on Sunday.

Anxiety had been building up ahead of the deadline and so relief was palpable across trading floors after Trump's tweet.

"The Santa rally is coming early as President Trump signaled US negotiators are getting very close to a big deal with China," said Edward Moya at OANDA, adding that Trump's tweet "was more optimistic than usual".

The pound is in focus as Britain goes to the polls in a key general election AFP / Ben STANSALL

The dollar powered ahead, as did oil amid hopes that a trade deal would help the global economy.

US Treasury bonds fell as investors moved money back into riskier assets.

The British currency traded weaker throughout election day in the UK, having spiked overnight to a 10-month peak at $1.3229 on expectations of an election win for Prime Minister Boris Johnson's Conservative Party.

Johnson called Thursday's snap vote in a bid to gain a decisive mandate to leave the European Union on January 31, more than three-and-a-half years after Britain narrowly voted in a referendum to leave.

"Just before voting opened, the polls suggested that a Conservative majority -- seen as the preferred market outcome... was perceived as increasingly likely," noted AJ Bell investment director Russ Mould.

The pound is in focus as voters go to the polls in Britain's key general election AFP / Ben STANSALL

However investors were nervous awaiting the vote outcome as polls have tightened in recent days, suggesting that a hung parliament, or no overall majority for either the Tories or main opposition Labour party, could still occur.

The ECB, meanwhile, gave markets little to trade on as Christine Lagarde chaired her first monetary policy council meeting and subsequent news conference.

The bank left interest rates unchanged and a maintained its massive bond-buying programme, as expected.

ECB economists also came up with figures suggesting both an uptick in inflation and "signs of stabilisation in the growth slowdown", which provided the euro with some tailwind.

Lagarde got a lot of attention at her first ECB news conference AFP / Daniel ROLAND

Lagarde said she would develop her own style and claimed to be neither dovish nor hawkish but aimed to be a "wise owl".

Still, Lagarde "came off as slightly hawkish", said OANDA's Moya. "Lagarde seems poised to help take the eurozone out of negative rates," he said.

Earlier Thursday in Asia, equity markets mostly closed higher after the Federal Reserve indicated it was unlikely to change US interest rates throughout next year.

The central bank, which has cut borrowing costs three times this year, said after a two-day meeting it would hold them for now and set its sights on low inflation and the global economy.

London - FTSE 100: UP 1.0 percent at 7,287.00 points (close)

Frankfurt - DAX 30: UP 0.6 percent at 13,221.64 (close)

Paris - CAC 40: UP 0.4 percent at 5,884.26 (close)

EURO STOXX 50: UP 0.5 percent at 3,706.35

New York - Dow: UP 0.7 percent at 28,092.91

Tokyo - Nikkei 225: UP 0.1 percent at 23,424.81 (close)

Hong Kong - Hang Seng: UP 1.3 percent at 26,994.14 (close)

Shanghai - Composite: DOWN 0.3 percent at 2,915.70 (close)

Pound/dollar: DOWN at $1.3129 from $1.3196 at 2200 GMT

Euro/pound: UP at 84.66 pence from 84.35 pence

Euro/dollar: DOWN at $1.1117 from $1.1130

Dollar/yen: UP at 109.26 yen from 108.56 yen