Asian markets move higher after Trump announces initial trade agreement with China
Asian markets traded in the green Monday as investors cheered progress on US-China trade talks.
China’s Shanghai Composite Index improved 1.4%, following a 0.9% rise on Friday.
South Korea’s Kospi also jumped up 1.4%. The Kospi ended positive Friday, too.
Hong Kong’s Hang Seng Index is up 1%. The index seems likely to extend its gains from Friday, when it logged its biggest daily increase in more than a month.
Japanese markets were closed Monday for a holiday.
US President Donald Trump announced Friday that the United States and China have reached a “very substantial phase one deal.”
Details are still to be finalized, but it includes a halt on US tariff increases that were supposed to go into effect this week. Trump also told reporters that intellectual property, financial services and agricultural purchases are included in the agreement.
Trump also suggested that he would meet Chinese President Xi Jinping at next month’s APEC summit in Chile.
Trade tensions have dominated global markets. But sentiment has improved after the most recent developments. In the United States, futures for the Dow, S&P 500 and Nasdaq were all trading up about 0.3% Monday during Asian hours.
Meanwhile, investors shrugged off trade data from China that fell short of analyst expectations.
Data from the Chinese government on Monday showed that exports fell 3.2% last month compared to the same period a year ago. That’s worse than the 3% decline that analysts polled by Reuters expected. It’s also more than the 1% fall recorded in August.
September imports fell by 8.5% — well below the 5.2% drop that analysts predicted.
Exports will probably continue to drag in the months ahead. Friday’s limited trade agreement and the lack of increased tariffs should only have a “marginal impact” on on export growth, wrote Martin Lynge Rasmussen, China economist for Capital Economics, in a research note Monday.
He added that while imports may tick up slightly in the short term, they are also not likely to have a strong rebound, since domestic demand is soft.
