The looming specter of Brexit has roiled financial markets for months, but on Friday, global stocks edged higher after U.K. lawmakers voted to delay Britain’s exit from the European Union for at least three months.
With the original exit date of March 29 fast approaching, Parliament has been unable to agree to a deal about the terms of the withdrawal, including how the region will handle issues like trade and immigration. On the news of the extension vote, the STOXX Europe 600 index rebounded to its highest level since October, and Britain’s FTSE 100 closed with a 0.6 percent gain.
Retailers have been waiting with bated breath for the Brexit outcome, with Adidas CEO Kasper Rørsted calling the impact of the withdrawal the company’s “biggest concern” for 2019 and the British Fashion Council calling for a second referendum on exiting the E.U. The turmoil has hit consumer spending, retail footfall and GDP growth, with the latter slowing to 1.4 percent in 2018, its lowest level since 2012, according to the Office for National Statistics. It’s projected to decline further, to 1.1 percent, in 2019.
Chinese news agency Xinhua also indicated on Friday that the U.S. and China had made substantive progress on trade talks, reporting that Chinese Vice Premier Liu He spoke by telephone with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer. The day prior, Mnuchin told reporters that a summit between President Donald Trump and Chinese president Xi Jinping would not happen at the end of March as originally planned, as the countries have further work to do on negotiations.
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Chinese Premier Li Keqiang also addressed the country’s economic slowdown at a press conference on Friday, assuring the public that the government will continue to support growth through monetary expansion and infrastructure investments.
The Shanghai Composite Index closed 1 percent higher, while the Shenzhen composite added 1.4 percent.
U.S. stocks — which have also felt the impact of uncertainty overseas — got a boost on Friday. The S&P 500 had climbed 0.7 percent by 12:30 p.m. EST, and the Dow Jones Industrial Average had risen more than 200 points.
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