Asian shares rise on optimism about US-China trade deal

TOKYO (AP) — Asian shares were mostly higher yesterday amid renewed hopes a United States (US) trade deal with China may be near, despite recent tough talk from President Donald Trump.

Japan’s benchmark Nikkei 225 gained 0.7 per cent to 23,300.09, while Australia’s S&P/ASX 200 added 1.2 per cent to 6,683.00. South Korea’s Kospi fell 0.4 per cent to 2,061.04. Hong Kong’s Hang Seng was up 0.4 per cent at 26,164.62, while the Shanghai Composite rose 0.6 per cent to 2,895.77.

Shares on Wall Street finished higher, with gains snapping a three-day losing streak for the S&P 500. The US market has swung sharply for months on every hint of progress about talks between the world’s largest economies, and Asian regional indexes have tended to reflect those fluctuations.

In the latest development, Bloomberg News reported that US negotiators expect a “Phase 1” trade agreement to be completed before US tariffs are set to rise on Chinese products December 15.

The report came a day after Trump said he wouldn’t mind waiting until after the 2020 elections for a deal, a remark that officials reportedly called off the cuff but nevertheless sent markets skidding.

“The trade war will be the key driver of sentiment in the immediate few weeks,” DBS Group analysts wrote in a report.

The S&P 500 rose 0.6 per cent to 3,112.76. Despite recovering some losses, the index is still down 0.9 per cent for the week.

The Dow Jones Industrial Average climbed 0.5 per cent to 27,649.78. The Nasdaq composite gained 0.5 per cent to 8,566.67. The Russell 2000 index of smaller company stocks picked up 0.7 per cent, to 1,613.90.

Reaction was muted to reports by Kyodo and other Japanese media that Tokyo plans a 26 trillion yen (USD239 billion) stimulus package to prop up growth, following an October sales tax hike.

The package, set to be approved later in the day, includes 13 trillion yen (USD119 billion) of government spending and the remainder coming from the private sector, the reports said.

ENERGY

Benchmark US crude lost 22 cents to USD58.21 a barrel in electronic trading on the New York Mercantile Exchange. It climbed USD2.33, or 4.2 per cent, to USD58.43 per barrel on Wednesday, as members of OPEC prepared to meet later this week and vote on production levels. Brent crude, the international standard, slipped 10 cents to USD62.90.

CURRENCIES

The dollar rose to 108.79 Japanese yen from 108.68 yen on Wednesday. The euro weakened slightly to USD1.1085 from USD1.1088.