Global financial markets reacted cautiously but positively on the first day of the high-level meeting between US President Donald Trump and Chinese President Xi Jinping resulting slash in prices of petroleum prices.
Expectations of a reduction in trade tensions in the ongoing talks between the two leaders supported investor confidence. Global stock markets saw a rally while crude oil prices recorded a slight decline.
However, geographical risks related to the Middle East, especially the Gulf region, still continued to affect global markets.
In the international market, Brent crude fell 0.40 percent to $105.21 per barrel, while US West Texas Intermediate crude oil closed down 0.07 percent at $100.95 per barrel. US President Donald Trump has claimed that Chinese President Xi Jinping has offered to help open the Strait of Hormuz.
According to market experts, this slight decrease in oil prices is the result of the hope that the talks between Trump and Xi Jinping can stabilize global trade and reduce economic pressure.
After the easing in oil prices, investors showed a tendency to take relatively higher risks, which resulted in significant buying in shares of technology and export-related companies.
The US stock index S&P 500 rose about 0.6% to a new record high, while the Nasdaq Composite rose more than 1%. The significant improvement in these markets was led by semiconductor and artificial intelligence (AI) companies.
Investors also welcomed news that Washington is considering easing export restrictions on AI chips to China as part of possible broader trade talks.
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