Asian markets ride positive wave on hopes of trade resolution

Asian markets rose yesterday as new tit-for-tat tariffs by China and the United States were seen as lighter than feared, while there are hopes the two sides will eventually avert a damaging trade war, reports AFP from Hong Kong.

Donald Trump on Monday said he would press ahead with 10 percent levies on another $200 billion of imports, prompting Beijing to target $60 billion of US goods with five to 10 percent taxes.

The developments were a clear escalation in the months-long standoff between the world’s top two economies. But analysts said dealers had been expecting the measures and essentially took the lower rates as a positive sign.

Wall Street’s three main indexes rallied and Asia picked up the baton.

Tokyo rose 1.1 percent, with a shift out of the safe-haven yen supporting Japanese exporters, while Hong Kong finished up 1.2 percent and Shanghai ended 1.1 percent higher.

Sydney rose 0.5 percent, Singapore was up one percent and Taipei increased 0.9 percent. Wellington, Bangkok and Jakarta also posted strong gains but Seoul was flat.

“The bottom line why the market didn’t react negatively was the lack of shock and awe given the tariffs were so well telegraphed,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

Dealers are now eyeing possible talks between Washington and Beijing after US Treasury Secretary Steven Mnuchin sent an invite to avert a trade war, which many fear could destabilise the world economy.

“It’s more likely that there will be some negotiated resolution coming through in the near term,” George Schultze, founder and CEO of Schultze Asset Management in New York, told Bloomberg TV.

“Cooler heads will eventually prevail, because otherwise both sides are shooting themselves in the foot.”

Chinese Premier Li Keqiang on Wednesday hit out at “unilateralism” during a speech at the summer session of the World Economic Forum.

 

Asian markets ride positive wave on hopes of trade resolution

Asian markets rose yesterday as new tit-for-tat tariffs by China and the United States were seen as lighter than feared, while there are hopes the two sides will eventually avert a damaging trade war, reports AFP from Hong Kong. Donald Trump on Monday said he would press ahead with 10 percent levies on another $200 billion of imports, prompting Beijing to target $60 billion of US goods with five to 10 percent taxes. The developments were a clear escalation in the months-long standoff between the worlds top two economies. But analysts said dealers had been expecting the measures and essentially took the lower rates as a positive sign. Wall Streets three main indexes rallied and Asia picked up the baton. Tokyo rose 1.1 percent, with a shift out of the safe-haven yen supporting Japanese exporters, while Hong Kong finished up 1.2 percent and Shanghai ended 1.1 percent higher. Sydney rose 0.5 percent, Singapore was up one percent and Taipei increased 0.9 percent. Wellington, Bangkok and Jakarta also posted strong gains but Seoul was flat. The bottom line why the market didnt react negatively was the lack of shock and awe given the tariffs were so well telegraphed, said Stephen Innes, head of Asia-Pacific trade at OANDA. Dealers are now eyeing possible talks between Washington and Beijing after US Treasury Secretary Steven Mnuchin sent an invite to avert a trade war, which many fear could destabilise the world economy. Its more likely that there will be some negotiated resolution coming through in the near term, George Schultze, founder and CEO of Schultze Asset Management in New York, told Bloomberg TV. Cooler heads will eventually prevail, because otherwise both sides are shooting themselves in the foot. Chinese Premier Li Keqiang on Wednesday hit out at unilateralism during a speech at the summer session of the World Economic Forum.