Stock markets soar as Trump delays painful tariffs

LONDON — Stocks markets rocketed and the dollar fell Thursday after Donald Trump paused steep tariffs on most countries, while investors appeared to brush off the US president's decision to ramp up duties on China.

Trump's shock decision Wednesday to delay most of the new tariffs by 90 days drove the European Union to put its counter-tariffs on hold, boosting European and Asian indices.

Trump's announcement came after European stock markets had closed down by around three percent Wednesday, but in time to send Wall Street soaring.

Trump back tracked on the punishing tariffs after global equities plummeted and US Treasuries -- considered the safest option in times of crisis -- showed signs of cracking.

But he kept a baseline 10 per cent tariff intact and ramped up his trade war with Beijing by hiking duties Chinese goods to 125 per cent after facing strong retaliation.

Global stock markets soared in response.

Paris and Frankfurt cruised almost six percent higher in afternoon deals Thursday while London advanced around 4.5 per cent.

In Asia, Tokyo surged nine percent.

While the tariffs pause was welcomed by investors, "the lack of long-term clarity may become more of an issue as time goes on", said AJ Bell investment director Russ Mould.

Chinese markets also gained support Thursday from optimism that Beijing will unveil fresh stimulus measures to support its economy.

Hong Kong rose more than two percent -- a third day of gains after collapsing more than 13 percent on Monday, its worst trading day since the Asian financial crisis in 1997.

Shanghai ended up more than one percent Thursday.

"Crucially, we are currently still on course for a disorderly economic decoupling between the world's two largest economies, with no immediate signs of either US or China backing down," said Jim Reid, an analyst at Deutsche Bank.

US Treasury yields have edged down after a successful auction of $38 billion in notes.

That eased pressure on the bond market, which had fanned worries that investors were losing confidence in the United States.

Elsewhere in Asia, Seoul, Singapore, Jakarta, Sydney, Saigon and Bangkok climbed between four and 6.6 percent.

Tech firms were the standout performers, with Sony, Sharp, Panasonic and SoftBank chalking up double-digit gains, while airlines, car makers and casinos also enjoyed strong buying.

Europe's banking sector soared, with Barclays and Deutsche Bank up 10 percent while French banks BNP Paribas and Societe Generale gained around eight percent.

Gold climbed almost three percent to $3,120 an ounce -- around $50 short of its record touched last month -- thanks to the weaker dollar and the metal's safe-haven status.

Trump's trade war is causing a headache for the Federal Reserve as it weighs cutting interest rates to protect the economy, or holding them steady to ward off the inflation many analysts say tariffs will fuel.

Investors are awaiting data later in the day that is expected to show US inflation slowed in March.

Oil prices dropped after bouncing more than four percent Wednesday, though they remain under pressure amid concerns about the global economy and its impact on demand.