HONG KONG, Oct 20 — Equity markets rose today after conciliatory comments from Donald Trump at the weekend eased worries about China-US trade tensions, while Tokyo stocks surged to a record on news of a deal to end political turmoil in Japan.
Investors also took heart from data showing China’s economy grew on par with expectations in the third quarter, with the gains building on the positive mood from Wall Street, where all three main indexes bounced back from Thursday’s losses.
Sentiment took a hit last week from a fresh flare-up in the trade standoff between Washington and Beijing when the US president threatened to hammer China with 100 per cent tariffs in response to its latest controls on rare earth exports.
That led to another round of tit-for-tat measures and Trump warning that a meeting with Chinese counterpart Xi Jinping planned for next week might not go ahead.
However, tempers appeared to have cooled, with the two sides agreeing Saturday to hold more trade talks.
Chinese state media said Vice Premier He Lifeng and US Treasury Secretary Scott Bessent had “candid, in-depth and constructive exchanges” during a call, and that both sides agreed to a new round of negotiations “as soon as possible”.
Hours before the call, Fox News released excerpts of an interview with Trump in which he said he would meet Xi at the APEC summit after all, and added that the 100 per cent tariff was “not sustainable”.
Markets across Asia rose on the softer tone, with Hong Kong up more than two per cent and Shanghai also well up as data showed China’s economy grew in line with expectations in the third quarter, though at its slowest pace in a year.
The data was released just hours before the start of a closely watched four-day meeting in Beijing with top Communist Party officials focused on long-term economic planning.
Sydney, Seoul, Wellington, Taipei, Mumbai and Bangkok also rallied with London, Paris and Frankfurt.
“Catalysed by Trump’s remark… markets appear priced for a positive or at least less-bad outcome,” said Chris Weston at Pepperstone.
“The market’s base case now seems to be that China will offer concessions on its rare-earth export controls, paving the way for the US to extend the current 30 per cent ‘tariff truce’ by another 90 days beyond its 10 November deadline.”
Tokyo led the gains, surging more than three per cent to a new peak, as Japan’s ruling party said it was set to sign a new coalition deal today, paving the way for Sanae Takaichi to become the country’s first woman prime minister.
Stocks were sent into a spin last week when her bid to become premier was derailed after her party’s coalition partner withdrew its support.
“We can probably say this is a government that wants to boost supply-side investment and is therefore good for equities, yields higher, yen weaker,” said Neil Wilson at Saxo Markets.
Traders also took heart from a bounce-back for US regional bank stocks Friday, which had been pummelled Thursday following disclosures from two mid-sized players of expected losses tied to problem loans.
The recovery Friday in those banks — Salt Lake City-based Zions Bancorp and Phoenix-based Western Alliance Bancorporation — and other lenders suggested investors were less fearful of systemic problems. — AFP
Malay Mail – Money
