World stocks advance as investors expect US, China to negotiate after all

World stocks edged higher on Thursday as investors used signs of an easing of Sino-U.S. trade tensions to dip back into riskier assets.

The MSCI world equity index, which tracks shares in 47 countries, climbed 0.4 percent, while shares in Europe jumped 1.6 percent to a two-week high.

Cyclical sectors including basic resources, autos and banks, hit particularly hard over the past two sessions in Europe, led gains.

Sentiment was lifted as Washington expressed a willingness to negotiate, after proposed U.S. tariffs on $50 billion of Chinese goods prompted swift retaliation from Beijing.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, a day after it hit its lowest in almost two months.

Japan's Nikkei ended 1.5 percent higher. Markets in mainland China, Hong Kong and Taiwan were closed for the Tomb Sweeping Day holiday on Thursday.

Global stocks, dollar tumble as Trump sparks global trade war fears

The spectre of a global trade war sent world stocks tumbling towards a 2.5 percent weekly loss on Friday, and left bruised investors reaching for the traditional antidotes - government bonds, gold and the Japanese yen.

The falls came after U. S. President Donald Trump said the United States would impose tariffs of 25 percent on imported steel and 10 percent on aluminium, sparking concerns of retaliatory moves from major trade partners China, Europe and neighbouring Canada.

Europe's STOXX 600 index fell over 1.5 percent led by a near 5 percent slump from world's biggest steelmaker ArcelorMittal SA and 2.5 - 6 percent drops from the region's carmakers worried that they might be next.