HONG KONG: Shanghai surged more than five percent Monday, leading a rally across Asian markets 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 the 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 buying, reports AFP.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.Shanghai closed up 5.6 percent and Hong Kong added 0.5 percent while Tokyo ended 0.5 percent higher.
Sydney put on 0.3 percent, while Seoul was 0.1 percent higher, Taipei added 0.7 percent and Jakarta rose 0.4 percent. There were also gains in Wellington, Bangkok, Mumbai and Singapore.
In early trade London rose 0.1 percent, Paris gained 0.2 percent and Frankfurt climbed 0.5 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.
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.