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Conflicting reports over a breakthrough in US-China trade talks indicate a cautiously positive start for the local market after Wall Street trimmed fresh highs.

ASX SPI200 index futures ended the night session 10 points or less than 0.2 per cent ahead at 6713 as doubts emerged over Chinese claims the US had agreed to lift trade tariffs in phases.

China’s Commerce Ministry said the two sides had agreed to simultaneously cancel some tariffs on each others’ goods. The tariff relief would come into effect at the same time in each nation and would affect the same amount of charges. Such an agreement would mark an important step forward in a long-running dispute that has battered both economies, created uncertainty for investors and undermined demand for raw materials from mining nations such as Australia..

However, doubts quickly emerged. Reuters reported that the proposal to lift tariffs faced stiff opposition within the White House. The administration feared rolling back US tariffs would sacrifice too much leverage in the negotiations, the report said, citing multiple unnamed sources.

US stocks hit fresh all-time highs on the initial reports of a breakthrough, but trimmed gains after the Reuters report crossed trading desks. The S&P 500 closed eight points or 0.28 per cent ahead as trade-sensitive sectors rumbled higher. The Dow added 182 points or 0.66 per cent and the Nasdaq 24 points or 0.28 per cent.

Trade bellwethers Caterpillar and Boeing put on 1.07 per cent and 1.51 per cent, respectively. The NYSE Arca Technology 100 rose 0.33 per cent. Industrial stocks exposed to tariffs also improved.

The outburst of optimism helped lift European stocks to four-year highs. The pan-European Stoxx 660 gained 0.37 per cent

Early whispers of a breakthrough may have reached Australian trading rooms yesterday afternoon as the market staged its largest rally in three weeks. The ASX 200 jumped 66 points or 1 per cent as the banks rebounded and the tech sector was boosted by company-specific news.

A retreat in the price of iron ore weighed on BHP and Rio Tinto in overnight action. The spot price for ore landed at China slipped 90 cents or 1.1 per cent yesterday to $US82.50 a dry ton. The improved mood in the US helped BHP’s US-listed stock gain 0.14 per cent, following a 0.64 per cent decline in its UK-listed stock. Rio Tinto sank 0.27 per cent in the US and 0.36 per cent in the UK.

Oil recouped most of Wednesday’s losses as traders rotated out of havens into assets more exposed to global growth. Brent crude settled 55 cents or 0.9 per cent higher at $US62.29 a barrel.

Gold thudded to a three-month low. December gold settled $26.70 or 1.8 per cent weaker at $US1,466.40 an ounce. The decline extended the precious metal’s loss this week beyond 3 per cent, its largest percentage weekly loss in more than a year.    

Trade-sensitive copper jumped to its highest level in more than two months. Benchmark copper on the London Metal Exchange rose 1.2 per cent to $US5,975 a tonne. Aluminium edged up 0.2 per cent, lead 0.1 per cent, tin 0.1 per cent and zinc 0.4 per cent. Nickel dropped 0.4 per cent.

The dollar rose a fifth of a cent to 68.98 US cents, paring earlier gains that saw it above 69 US cents.

The day ahead brings September home loans data, a quarterly monetary policy statement from the Reserve Bank and Chinese trade figures. Wall Street has a report due tonight on consumer sentiment, as well as the tailenders of the latest quarterly reporting season.  

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