Asian stocks broadly higher on trade optimism


Stocks across Asia rose on Friday following signs that Beijing is open to a resolution to its trade war with the US, prompting investors to head back into risk assets.

In early morning trading, Japan’s Topix and South Korea’s Kospi added 1 per cent and 1.4 per cent, respectively. The gains in the Japanese benchmark came as the country’s jobless rate came in at a 27-year low in July. South Korea’s central bank left its benchmark rate unchanged at 1.5 per cent in a widely anticipated decision. 

Hong Kong’s Hang Seng index added 1.2 per cent, while China’s CSI 300 of Shanghai- and Shenzhen-listed names moved 0.7 per cent higher. Australia’s S&P/ASX 200 added 1 per cent.

A day earlier, Gao Feng, China’s commerce ministry spokesman, told reporters he hoped the US would cancel additional tariffs in what has been interpreted as a signal that Beijing is looking to avoid another escalation in trade tensions. 

US President Donald Trump told Fox News on Thursday that further talks with Chinese officials were scheduled, without giving further details. “China wants to make a deal,” the president said. 

Overnight, the S&P 500 rallied 1.3 per cent on the back of renewed optimism on trade. 

However, some analysts cautioned over investors enthusiasm towards the latest news on the trade front. “I believe the market has interpreted recent developments too positively. It will be very difficult for President Trump to back down so quickly,” said Iris Pang, Greater China economist at ING.

Gold, often viewed as a haven by investors, peeled back 0.2 per cent to $1,524.6 per troy ounce, while the Japanese yen held steady at around ¥106.46 to the dollar. Yields on US 10-year treasuries fell one basis point to 1.5 per cent. 

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S&P 500 futures were pointing to losses of 0.1 per cent when Wall Street begins trading on Friday.

Coming up

  • Thailand trade data
  • German retail sales
  • France, Italy CPI

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Markets Briefing is a concise look at global markets, updated throughout the trading day by Financial Times journalists in Hong Kong, New York and London. Feedback? Write in the comments below or send us an email.



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