Bulletin
Investor Alert

London Markets Close in:

Asia Markets Archives | Email alerts

Dec. 3, 2018, 12:35 p.m. EST

Asia-Pacific stocks jump on U.S.-China trade truce

Benchmarks in Japan, Hong Kong, Shanghai surge

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    NIKKEI 225 Index (NIK)
  • X
    Shanghai Composite Index (SHCOMP)
  • X
    KOSPI Composite Index (180721)

or Cancel Already have a watchlist? Log In

By Robb M. Stewart and Mike Bird


Reuters
Japanese stocks were set to soar Monday.

Asia-Pacific stocks end sharply higher Monday, following a cease-fire on tariffs between Beijing and Washington at the Group of 20 meeting in Argentina over the weekend.

Japan’s Nikkei 225 /zigman2/quotes/210597971/delayed JP:NIK +0.23% , China’s Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.43% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.02% stock indexes gained 1%, 2.6% and 1.7%, respectively. The Chinese yuan /zigman2/quotes/210561991/realtime/sampled USDCNY -0.1349%  rose 1.1% to about 6.8834 per U.S. dollar. Benchmark indexes in Hong Kong /zigman2/quotes/210598030/delayed HK:HSI +1.07% , Singapore /zigman2/quotes/210597985/delayed SG:STI +0.65% , Taiwan and Australia /zigman2/quotes/210598100/delayed AU:XJO +0.36%  also posted solid gains as well.

President Donald Trump and Chinese President Xi Jinping approved the deal on Saturday in Buenos Aires. It offers Beijing a reprieve from a planned increase in tariffs, scheduled for Jan. 1, on $200 billion in Chinese goods exports to the U.S. Tariffs were scheduled to rise to 25% from 10%.

Read: Dow, S&P 500 futures surge after trade-war timeout

“For now, postponement is good news. To the extent that serious discussions can be had between the U.S. and China, tariffs might be put off indefinitely,” said Stephen Gallagher, an economist at Société Générale.

The suspension of tariff increases relies on progress in talks that both sides aim to complete in the next 90 days covering broader issues, including intellectual property protection.

Some forecasters didn’t think the increase could be avoided, making the outcome a positive one for financial markets, which have been rattled by trade-related developments this year.

The tensions have been felt most in the markets of trade-focused economies in Asia and other emerging markets this year, putting pressure on equities and currencies in those regions.

The Australian dollar /zigman2/quotes/210560947/realtime/sampled AUDUSD -0.1317% jumped against the U.S. dollar, reaching its highest point since August. The Australian economy is quite sensitive to trade and its exports to China expose it to any slowdown there. Shares in Anglo-Australian mining giant BHP Group Ltd. /zigman2/quotes/201448516/delayed AU:BHP -0.13% advanced 3.7%.

A Chinese pledge to buy more American agricultural products sent soybean futures climbing—up 1.9% to as high as $9.24 per bushel—the highest since August. Shares in China’s WH Group Ltd. /zigman2/quotes/204247792/delayed HK:288 +4.94% , the world’s largest pork producer, rose 11.7% in morning trading in Hong Kong.

Shipping stocks, like Japan’s Mitsui O.S.K. Lines Ltd. /zigman2/quotes/204152844/delayed JP:9104 -0.14% and Taiwan’s Evergreen Marine Corp. /zigman2/quotes/202683144/delayed TW:2603 -0.81% were also beneficiaries, rising 4% and 2.6%, respectively.

Strategists at Morgan Stanley raised their forecasts for gains next year in the MSCI China and Hang Seng indexes, suggesting their clients take an overweight allocation relative to other emerging-market stocks.

But others said while the potential for a three-month time out is welcome news for investors, the short-term truce means broader differences between the two countries haven’t been resolved.

“The result is better than the market expected, but the huge divide remaining continues to suggest a bumpy ride ahead,” said Citigroup China economist Li-Gang Liu, pointing to differences in the Chinese and U.S. accounts of the deal. In their own statements, Chinese officials made no mention of the three-month deadline.

The timeline is also difficult for the Chinese government because it bumps into the country’s annual legislative assembly in March, during which the government won’t want to be perceived as caving in to U.S. trade demands, according to Robert Rennie, head of financial market strategy at Westpac Banking Corp.

In a note to clients, analysts at Nomura said: “Reaching a comprehensive agreement on all the outstanding issues in 90 days seems, essentially, impossible.” However, it could allow the two sides to reach some agreements, Nomura said, such as additional and more specific Chinese commitments to buy more American goods.

Oil prices climbed sharply, with Brent crude increasing 3.1% to $61.27 a barrel. Elsewhere at the G-20 meeting, Russia and Saudi Arabia agreed to extend efforts by the Organization of the Petroleum Exporting Countries to curb production.

/zigman2/quotes/210597971/delayed
JP : Nikkei
23,354.40
+54.31 +0.23%
Volume: 0.00
Dec. 6, 2019 3:15p
loading...
/zigman2/quotes/210598127/delayed
CN : China: Shanghai
2,912.01
+12.55 +0.43%
Volume: 13.41B
Dec. 6, 2019 3:01p
loading...
/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,081.85
+21.11 +1.02%
Volume: 440,188
Dec. 6, 2019 6:01p
loading...
/zigman2/quotes/210561991/realtime/sampled
US : Tullett Prebon
7.0353
-0.0095 -0.1349%
Volume: 0.0000
Dec. 6, 2019 10:28a
loading...
/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
26,498.37
+281.33 +1.07%
Volume: 1.64M
Dec. 6, 2019 4:08p
loading...
/zigman2/quotes/210597985/delayed
SG : Singapore: SGX
3,194.71
+20.52 +0.65%
Volume: 0.00
Dec. 6, 2019 5:20p
loading...
/zigman2/quotes/210598100/delayed
AU : S&P ASX
6,707.00
+24.00 +0.36%
Volume: 459,318
Dec. 6, 2019 5:09p
loading...
/zigman2/quotes/210560947/realtime/sampled
US : Tullett Prebon
0.6825
-0.0009 -0.1317%
Volume: 0.0000
Dec. 6, 2019 10:51a
loading...
/zigman2/quotes/201448516/delayed
AU : Australia: Sydney
$ 37.36
-0.05 -0.13%
Volume: 2.86M
Dec. 6, 2019 4:10p
P/E Ratio
15.72
Dividend Yield
5.13%
Market Cap
$189.17 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/204247792/delayed
HK : Hong Kong
HK$ 8.28
+0.39 +4.94%
Volume: 95.13M
Dec. 6, 2019 4:08p
P/E Ratio
15.59
Dividend Yield
2.42%
Market Cap
HK$116.12 billion
Rev. per Employee
HK$1.61M
loading...
/zigman2/quotes/204152844/delayed
JP : Japan: Tokyo
¥ 2,952.00
-4.00 -0.14%
Volume: 650,700
Dec. 6, 2019 3:00p
P/E Ratio
7.81
Dividend Yield
2.20%
Market Cap
¥353.51 billion
Rev. per Employee
¥125.14M
loading...
/zigman2/quotes/202683144/delayed
TW : Taiwan
NT$ 12.25
-0.10 -0.81%
Volume: 12.83M
Dec. 6, 2019 1:30p
P/E Ratio
53.89
Dividend Yield
N/A
Market Cap
NT$58.70 billion
Rev. per Employee
N/A
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.