Via Financial Times

Global stocks hit fresh record highs on Monday as a trade agreement between the US and China de-escalated the long running trade war between the world’s biggest economies and soothed investor nerves.

The MSCI All-World index, which includes developed and emerging market equities, notched a new all-time high. It was recently up 0.68 per cent.

Wall Street followed European equities higher, with the S&P 500 adding 0.8 per cent in early New York trading. Europe’s composite Stoxx 600 was up 1.4 per cent.

That left both indices at record highs as analysts suggested the world economy had touched “peak tariffs” in the tit-for-tat trade dispute between Washington and Beijing.

Halfway through the final month of the year the Stoxx has risen 2.5 per cent and is on track for its fourth consecutive monthly climb. The index has risen every month but two this year and is heading for its biggest annual advance in a decade.

A limited agreement between the US and China, struck on Friday, to pause their trade war promises to ease pressure on the global economy as 2020 looms.

“We may have reached the point of ‘peak tariffs’ and this deal could be the start of a series of phased rollbacks, which could unlock further upside for equity markets, driven by an improvement in business confidence and a recovery in investment,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

The advance to a record for European equities comes as London’s benchmark FTSE 100 jumped more than 2 per cent in its biggest percentage gain since 2016

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It was the second day of trading for UK stocks since Conservative prime minister Boris Johnson was returned to office with a convincing majority in Thursday’s general election.

Goldman Sachs said it is bullish on UK domestic stocks, especially homebuilders and banks. Monday’s gains bring its rise for the past two trading sessions to 3.6 per cent.