UPDATE 1-European stock futures rally on relief over U.S.-China trade talks

UPDATE 1-European stock futures rally on relief over U.S.-China trade talks

(Updates prices, adds comment)
LONDON, July 1 (Reuters) - European stock futures rallied in
early trade on Monday, hitting their highest level since August
2018 as investors piled into assets considered riskier after
Washington and Beijing agreed to resume trade talks, averting an
escalation of a protracted dispute.
At 0637 GMT, the Eurostoxx 50 futures STXEc1 was up 1%
while trade-sensitive DAX futures FDXc1 was up 1.5%, with both
contracts hitting their highest level since August last year.
Paris' CAC 40 July futures was 1% higher.
The buying came after the United States and China agreed on
Saturday to resume trade negotiations after President Donald
Trump offered concessions to his Chinese counterpart Xi Jinping
when the two met at the sidelines of the G20 summit in Japan.
These included no new tariffs and an easing of restrictions
on Chinese tech company Huawei HWT.UL in order to reduce
tensions with Beijing. China agreed to make unspecified new
purchases of U.S. farm products and return to the negotiating
table.
The reprieve for the world's No. 2 smartphone maker was
expected to give chipmakers an additional boost - shares in
Germany's Infineon IFXGn.DE were indicating up as much as 3%.
With about 6% or roughly 80 billion euros ($90.6 billion) of
its constituents' revenues originating from China, Germany's DAX
.GDAXI is often used as a proxy to bet on a trade war.
While investors cheered the new ceasefire between the
world's two largest economies, ING's Raoul Leering, head of
international trade analysis, struck a note of caution.
"Neither the U.S. nor China reported that any of the
disagreements which proved to have been deal breakers in May are
closer to being resolved. So, much work needs to be done to
prevent another break up of negotiations," she said.


($1 = 0.8827 euros)