Stocks fluctuate as traders wind down for Christmas

LONDON — Traders' screens twinkled red and green on Monday as stock markets wobbled on Monday in a muted start to a holiday-shortened trading week, with many investors already away for Christmas.

Asian equities fluctuated on Monday with activity thinning out. In Europe, London stocks pushed higher while Frankfurt and Paris appeared to run out of fizz.

But on Wall Street confidence remained buoyed by relief at prospects for the China-US trade deal, with the main indices moving higher off record closes as trading got underway.

"It's been a strong run up to Christmas for the stock markets and it seems traders are taking a little breather in this shortened trading week," said analyst Craig Erlam at trading firm Oanda.

"It's been a good few weeks for investors, spurred primarily by the de-escalation in the trade war, with Trump... claiming it will be signed very shortly."

Global equities have enjoyed a flourish as they head towards the end of the year, having been on a roller-coaster ride for 12 months owing to the long-running trade row and Brexit.

Observers say that with those two major issues cleared up for now, 2020 could see a healthy run-up in prices, boosted by looser central bank monetary policy as well as signs of improvement in economies around the world.

Traders were still breathing a sign of relief after Britain's freshly-elected parliament approved Prime Minister Boris Johnson's divorce deal with the European Union.

"The passing of Boris' Brexit withdrawal bill on Friday means MPs in the UK can finally relax and enjoy all of the festivities that this time of year brings," added Erlam.

Wall Street provided yet another record-breaking lead on Friday after data confirmed the US economy enjoyed reasonable growth in the third quarter, while other reports showed personal income and consumer confidence improving.

The New York gains on Friday lent some support to Asian markets but dealers there struggled to build any momentum, despite Beijing saying will lower import tariffs on more than 850 products including frozen pork from next month.

While the move does not appear to be linked to the bruising trade war between China and the US, which has seen Washington and Beijing exchanging levies on goods worth hundreds of billions of dollars, it will likely help reduce tensions.

Hong Kong finished up 0.1 per cent while Tokyo barely moved, and Shanghai sank more than one per cent.

Wall Street seemed to welcome the news, with the Dow pushing 0.3 per cent higher in the first minute of trading.

It was also helped by shares in Boeing jumping 2.7 per cent after the aerospace giant announced it had replaced its embattled chief executive, Dennis Muilenburg, saying a change was needed as it attempts to restore its reputation amid the protracted 737 MAX crisis.

With very little by way of market-moving events on the horizon, analysts are expecting a quiet week.

"It has been a quiet morning in Europe as dealers are winding down for Christmas," noted CMC Markets analyst David Madden.

"As it is Christmas week, market volatility is low, and trading ranges are small, so it is possible today's movements are not a true reflection of market sentiment."