HONG KONG: Asian markets surged Monday after Donald Trump and Xi Jinping agreed to restart trade talks, reviving hopes of an end to their tariff war, while oil prices also rallied on news that Saudi Arabia and Russia will extend their output caps.
Trump’s historic visit to North Korea, where he met leader Kim Jong Un, soothed geopolitical concerns and added to the upbeat mood on trading floors.After a highly anticipated meeting on the sidelines of the G20 summit Saturday, the US president said negotiations to resolve the standoff between the world’s two biggest economies were “back on track” and he would hold off imposing threatened new levies on Chinese goods, reports AFP.
Trump also signalled a softer position on Chinese telecom giant Huawei, a major bone of contention in the row, by saying US companies could sell equipment “where there’s no great national security problem”, White House economic adviser Larry Kudlow said Sunday. China pledged to buy more US agricultural machinery.
While there had been a quiet sense of optimism the talks would end with an agreement to return to the negotiating table, the apparent concession on Huawei took some by surprise and provided some extra buying support. The news was much-needed after Trump sparked volatility in early May with his shock decision to hit China with new tariffs and halt talks that had seemed to be nearing a positive end.
“After spending the better part of two months in trade war purgatory and with G20 done and dusted, risk markets have responded to Saturday’s events,” said Stephen Innes at Vanguard Markets.
“Indeed, investors heaved a massive, but exhausted, sigh of relief that both the US and China opted to push the reset button and restart trade negotiations amidst other pleasantries — now we’ll have to see whether it all sticks.”