HONG KONG (AFP) – Asian markets mostly rose yesterday following another record close on Wall Street as investors bet on China and the United States (US) reaching a mini trade deal despite a report saying Beijing was concerned about the chances of an agreement.
Hong Kong extended Monday’s rally with another surge but continuing protests in parts of the city – particularly a violent standoff at a university – remained a source of worry.
Regional traders were given another strong lead from Wall Street, where all three main indexes ended at new records on hopes for a good holiday shopping season with the key Black Friday sales day coming next week.
World equities have broadly been on the rise in recent weeks on optimism that the world’s top two economies will eventually hammer out a mini trade deal as part of a wider agreement.
However, there have been bumps in the road and the latest came on Monday when CNBC reported that China was pessimistic about the chances of a pact because Donald Trump is not in favour of rolling back tariffs.
Trump last week denied claims by Beijing that the two sides had put in place a plan to remove levies as the talks progress.
The report again highlighted the fragile nature of the negotiations.
“Investors have little option but to keep pace with the rapid shifts on the US-China phase-one deal, attempting to make sense of the many comments – official and from press ‘sources’ – on whether a rollback was now genuinely on the table,” said Stephen Innes at AxiTrader.
“Ultimately they remain hostage to these developments.” However, he said the broad gains yesterday meant “it looks like (investors) are starting to take trade headlines with a barrel of salt”.
In early trade, regional markets swung in and out of positive territory.
Shanghai jumped 0.9 per cent, Sydney piled on 0.7 per cent and Taipei rallied 0.5 per cent, while Wellington and Manila were both up 0.2 per cent. Jakarta and Mumbai also enjoyed gains.
But Tokyo ended 0.5 per cent lower, Singapore lost 0.6 per cent and Seoul shed 0.3 per cent, while Bangkok was slightly lower.
National Australia Bank’s Rodrigo Catril said he was still betting on an agreement being reached.
“The negotiations remain ongoing (and) a phase-one deal looks more likely than not, but as usual the devil will be in the detail,” he said in a commentary. “The more tariff rollbacks we get, the better for market sentiment and global growth outlook.”
A decision by Washington to delay by another 90 days a ban of US firms from doing business with China’s Huawei provided support.
While US officials initially said the row over the tech firm – which they warn is a danger to national security – was not related to the trade row, Trump has suggested a resolution to the standoff could involve reaching some common ground concerning Huawei.
Hong Kong rose 1.6 per cent, having jumped 1.4 per cent on Monday, as traders shift back into buying following last week’s losses of around five per cent.
The gains come as the widespread protests that hammered the city’s transport network last week have been less disruptive over the past two days.