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Asia markets rally as Trump delays China tariffs
HONG KONG, Feb 25, 2019 (BSS/AFP) – Shanghai led a rally across Asian
markets Monday after Donald Trump said he would delay a hike in tariffs on
Chinese goods citing “substantial progress” in trade talks and fuelling hopes
of an end to their long-running stand-off.
Optimism over the negotiations had already provided support to global
equities, spurring a rally in January and February, but the president’s
comments gave extra ammunition to investors to ramp up the buying.
The news also fired currency markets with the yuan extending gains to a
seven-month high, while other high-yielding, riskier units were also up
against the dollar.
Trump said on Twitter that the US “has made substantial progress in our
trade talks with China on important structural issues including intellectual
property protection, technology transfer, agriculture, services, currency,
and many other issues”.
He added: “As a result of these very productive talks, I will be delaying
the US increase in tariffs now scheduled for March 1.”
The president also said he planned to hold a summit with his Chinese
counterpart Xi Jinping at his Mar-a-Lago estate in Florida to sign a deal.
China’s Xinhua news agency added that the two sides had “made substantial
progress on specific issues” including on transfer of technology,
intellectual property and agriculture.
– ‘Sigh of relief’ –
In morning trade, Shanghai jumped 2.8 percent and Hong Kong added 0.4
percent while Tokyo ended the morning 0.7 percent higher.
Sydney and Singapore each put on 0.1 percent, while Seoul was flat, Taipei
added 0.4 percent and Jakarta rose 0.3 percent.
The gains in Asia followed another positive lead from Wall Street, where
the Dow enjoyed its ninth straight weekly gain — the longest streak since
May 1995.
“This is a sigh of relief,” said Ben Emons, managing director for global
macro strategy at Medley Global Advisors. “Markets will still keep a level of
caution, but this news is encouraging,” he told Bloomberg TV.
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The upbeat sentiment lifted high-risk currencies, with the yuan hitting
its highest level against the dollar since July, while South Korea’s won, the
Australian dollar and the Indonesia rupiah were also well up.
Forex traders will be closely watching speeches this week from top Federal
Reserve officials — including chairman Jerome Powell’s appearance in front
of lawmakers — hoping for clues about the bank’s monetary policy plans.
Wall Street “will be looking for soothing comments about the future size
of the balance sheet — the bigger the better — and insights into future
rate hikes”, said Jeffrey Halley, senior market analyst at OANDA.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.7 percent at 21,572.11 (break)
Hong Kong – Hang Seng: UP 0.4 percent at 28,926.21
Shanghai – Composite: UP 2.8 percent at 2,882.51
Euro/dollar: UP at $1.1347 from $1.1332 at 2130 GMT
Pound/dollar: UP at $1.3067 from $1.3053
Dollar/yen: DOWN at 110.73 yen from 110.75
Oil – West Texas Intermediate: UP 15 cents at $57.41
Oil – Brent Crude: UP 19 cents at $67.31 per barrel
New York – Dow: UP 0.7 percent at 26,031.81 (close)
London – FTSE 100: UP 0.2 percent at 7,178.60 (close)
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