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Asian markets rally as hopes of a trade deal get an extra boost

WT24 Desk

HONG KONG – Asian markets rose Monday on growingoptimism for a trade deal between China and the United States after reports said the two sides were close to a breakthrough, AFP reports.

With a busy week of data releases and events coming up, investors got off
to a positive start as they cheered stories saying the tariffs stand-off
between world’s top two economies that has dragged on global growth could soon be resolved.

The Wall Street Journal said negotiations last month had narrowed key
differences and an agreement could be ready for signing at a summit between Donald Trump and Xi Jinping in late March.

The newspaper, as well as Bloomberg News, also said Beijing had
tentatively agreed to lower tariffs or ease certain restrictions, work
quicker to open up its auto market and increase its purchases of US goods.

In exchange for Chinese concessions, Washington would do away with most of the trade sanctions it imposed last year, the reports said.

Shanghai led gains on Monday, rising more than one percent, while Hong
Kong put on 0.3 percent and Tokyo headed into the break 0.8 percent better
off.

Sydney rose 0.5 percent and Singapore 0.1 percent, while Seoul put on 0.3
percent, Wellington edged up 0.6 percent and Jakarta 0.3 percent.

– ‘Much-needed lift’ –

Tai Hui, Asia-Pacific chief market strategist at JP Morgan Asset
Management, said that while there were a number of hurdles to a final
agreement such as on intellectual property rights, traders were broadly
confident.

“Investors are fully aware of these long-term challenges, but a more
sustained ceasefire on tariffs will help to reduce business uncertainty. This
could provide a much-needed lift to business sentiment and improve growth momentum entering the summer,” he said.

Focus turns Tuesday to the start of China’s annual National People’s
Congress where it will unveil its growth forecast for this year, while
dealers will be looking for any measures to stimulate the stuttering economy.

This week also sees the release of Chinese trade data and key US jobs
figures, which will provide a fresh look at the state of the US economy and
the Federal Reserve’s monetary policy plans.

On currency markets the dollar extended gains against the safe-haven yen
as dealers became more confident, while the greenback was down against most high-yielding units including the Australian dollar, South African rand and Thai baht. China’s yuan was holding around eight-month highs.

Adding to dollar weakness were comments from Trump hitting out at a strong currency.

“I want a strong dollar but I want a dollar that does great for our
country, not a dollar that’s so strong that it makes it prohibitive for us to
do business with other nations and take their business,” he said during a
speech at the Conservative Political Action Conference in Maryland on
Saturday, according to Bloomberg News.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.8 percent at 21,782.12 (break)

Hong Kong – Hang Seng: UP 0.2 percent at 28,854.83

Shanghai – Composite: UP 1.3 percent at 3,033.21

Euro/dollar: UP at $1.1370 from $1.1366 at 2140 GMT

Pound/dollar: UP at $1.3234 from $1.3208

Dollar/yen: UP at 111.99 yen from 111.92 yen

Oil – West Texas Intermediate: UP 32 cents at $56.12 per barrel

Oil – Brent Crude: UP 34 cents at $65.41 per barrel

New York – Dow: UP 0.4 percent at 26,026.32 (close)

London – FTSE 100: UP 0.5 percent at 7,106.73 (close)

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