Asian shares surge as Trump boosts trade deal hopes

Asian shares surge as Trump boosts trade deal hopes

US President Donald Trump said China trade talks were going well and a deal deadline could be
US President Donald Trump said China trade talks were going well and a deal deadline could be extended. (Photo: AFP/Mandel Ngan)

HONG KONG: Asian stocks surged on Wednesday (Feb 13) as President Donald Trump said he may extend his trade deal deadline with Beijing and a report claimed China's Xi Jinping would meet top US officials, seeming to boost the prospects of an agreement.

High-level talks are due to begin in the Chinese capital Thursday aimed at an accord to stop sharp US tariff hikes that could damage the global economy.

Trump said he could let his Mar 1 deadline for the tariffs "slide for a little while" if the two sides were close to a meaningful deal, adding that he expects a summit with President Xi "at some point".

Later, a report in the South China Morning Post said Xi would personally meet the US delegation in Beijing, suggesting a redoubled effort to make progress on a deal.

Washington is demanding changes from Beijing on what it says are unfair commercial practices. A resolution would prevent US tariffs more than doubling on US$200 billion in Chinese imports next month.

Tokyo added a further 1.3 per cent after Tuesday's gains to finish at a two-month high.

Hong Kong rose 1.2 per cent, and Shanghai earned 1.8 per cent on the news, following Wall Street's lead.

European stocks also climbed at the open, with London up 0.3 per cent, Paris 0.3 per cent and Frankfurt 0.4 per cent.

However, some analysts struck a cautious tone, noting that much work needs to be completed before a framework agreement is in reach.

"The rally in stocks has been based on hope rather than any concrete agreements overnight," warned Oanda senior analyst Jeffrey Halley, predicting short-term volatility to come as headlines emerge from Beijing.

Elsewhere Sydney shed 0.3 per cent, with calls for a snap election amid political tensions over refugees adding to underwhelming corporate earnings and subdued metal prices.

SHUTDOWN UNLIKELY

The New Zealand dollar soared 1.5 per cent as the central bank held interest rates unchanged and forecast no moves until 2021 - stumping expectations it may follow dovish leads elsewhere by indicating a rate cut.

Renewed global investor confidence saw a movement away from the greenback - which has enjoyed a strong rally in the past week - to riskier currencies.

The pound moved upwards past US$1.29, despite no-deal Brexit fears as Prime Minister Theresa May was accused by the opposition of "running down the clock" and "playing chicken" with Brussels over talks.

The yuan also earned back losses after it had dropped following the Lunar New Year break.

Trump's suggestion that another chaotic US government shutdown was now unlikely following a deal struck in Congress over border security further fuelled risk appetite.

The deal to offer nearly US$1.4 billion for construction of a Mexico border wall, as well as other security measures, fell far short of Trump's demands but has been presented as a workable compromise.

"I don't think you're going to see a shutdown," said the president.

Oil continued its climb after heavyweight Saudi Arabia slashed output and exports fell in crisis-hit Venezuela.

- Key figures around 0800 GMT -

Tokyo - Nikkei 225: UP 1.3 per cent at 21,144.48 (close)

Hong Kong - Hang Seng: UP 1.2 per cent at 28,497.59 (close)

Shanghai - Composite: UP 1.8 per cent at 2,721.07 (close)

London - FTSE 100: UP 0.3 per cent at 7,155.94

Euro/dollar: UP at US$1.1320 from US$1.1315 at 2130 GMT Tuesday

Dollar/yen: UP at ¥110.69 from ¥110.48

Pound/dollar: UP at US$1.2905 from US$1.2896

Oil - West Texas Intermediate: UP 40 cents at US$53.50 per barrel

Oil - Brent Crude: UP 53 cents at US$62.95 per barrel

New York - Dow: UP 1.5 per cent at 25,425.76 (close)

Source: AFP/ec

Bookmark