Business

Asian markets rally as Trump says trade talks ‘going very well’


Bangladeshpost
Published : 11 Oct 2019 09:20 PM | Updated : 05 Sep 2020 12:06 PM

Asian markets rallied on Friday on signsof progress in the China-US trade talks, with Donald Trump saying they were“going very well”, while the pound held gains after the leaders of Britainand Ireland indicated a potential breakthrough in Brexit talks, reports BSS/AFP. After a nervous week on trading floors, negotiators from the world’s toptwo economies kicked off long-awaited negotiations on resolving their long-running tariffs row on a positive footing, easing worries that they might becut short.

Without elaborating, Trump told reporters: “I will say I think it’s goingreally well. We had a very, very good negotiation with China.” Adding to the positive vibes was news that Trump would meet China’s toptrade envoy Liu He at the White House. The developments allowed dealers to breathe a sigh of relief as tensionsbetween the two sides appeared to be growing after the US put newrestrictions on Chinese firms over human rights abuses and reports Beijinghad narrowed the issues it was willing to discuss.

“The fog of trade war is beginning to lift, giving way to an air of tradeoptimism sweeping through global capital markets,” said Stephen Innes, Asia-Pacific market strategist at AxiTrader. “Investors are starting to believe there is light at the end of the…tunnel as hope springs eternal.”

Hong Kong led gains across Asia, jumping more than one percent, Tokyoheading into the break one percent higher and Shanghai adding 0.1 percent. Talks are expected to resume on Friday, with hopes they can at least leadto a delay in tariffs due next week being imposed on China.

– Brexit optimism –
“The prospect of US-China trade truce that results in the suspension offurther planned tariffs increases is rightly welcome news,” Rodrigo Catril atNational Australia Bank said. “But as it is often the case, the devil will be in the detail,” he warned,adding that if the optimism is to last “a meaningful de-escalation intensions is required”.

AndThanos Vamvakidis, at Bank of America Merrill Lynch, told Bloomberg TV“we are not out of the woods yet”. Markets are also getting some support from rare signs of progress in theBrexit saga after British Prime Minister Boris Johnson and his Irishcounterpart Leo Varadkar said they could see a route towards striking apossible divorce deal.

After hours of talks regarding the vexed question of Northern Ireland, thetwo issued a joint statement that said: “Both continue to believe a deal isin everybody’s interest. They agreed that they could see a pathway to apossible deal.” While Varadkar said there were still hurdles to overcome, the news didprovide some much-needed hope in the crisis after German Chancellor AngelaMerkel was reported to have said Brexit talks were “close to breaking down”.

The pound surged two percent against the dollar on Thursday and alsorallied on the euro, and in early Asian trade managed to hold its ground. “The positive vibe has raised some hope for a chance of a Brexit dealahead of the EU summit at the end of next week,” NAB’s Catril added.Hopes for the China-US talks helped oil prices higher, with traders alsocheered by OPEC Secretary-General Mohammad Barkindo saying the grouping ofthe world’s giant producers would do what it could to avert another slump. Both main contracts rose Friday, having put on more than one percent the day before.

Key figures around 0230 GMT
Tokyo – Nikkei 225: UP 1.0 percent at 21,761.25 (break)
Hong Kong – Hang Seng: UP 1.4 percent at 26,066.70
Shanghai – Composite: UP 0.1 percent at 2,950.37
Pound/dollar: DOWN at $1.2439 from $1.2440 at 2100 GMT
Euro/pound: DOWN at 88.52 pence from 89.56 pence
Euro/dollar: UP at $1.1010 from $1.1006 at 2100 GMT
Dollar/yen: UP at 108.06 yen from 107.88 yen
West Texas Intermediate: UP 24 cents at $53.79 per barrel
Brent North Sea crude: UP 31 cents at $59.41 per barrel
New York – Dow: UP 0.6 percent at 26,496.67 (close)
London – FTSE 100: UP 0.3 percent at 7,186.36 (close)