Asian shares buoyed by optimism on US-China trade talks
SYDNEY, April 15: Asian shares neared nine-month highs on Monday after US Treasury Secretary Steven Mnuchin said he hoped US-China trade talks were approaching a final lap, while strong Chinese export and bank loan data boosted confidence in the global economy.
The optimism on trade together with the US Federal Reserve pausing its rate tightening efforts and Britain lawmakers getting an extension on the country's exit from the European Union helped lift the mood in equities markets.
"US-China trade concerns have receded, the Fed is no longer hiking rates and Brexit has been postponed, which all bodes well for risk assets," said Takashi Hiroki, chief strategist at Monex Securities.
In early European trades, the pan-region Euro Stoxx 50 futures, German DAX futures and London's FTSE futures each rose about 0.2 per cent. E-Minis for the S&P 500 were little changed.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.4 per cent to its highest since late July. Chinese shares were buoyant, with the blue-chip CSI300 index rising 0.6 per cent.
Hong Kong's Hang Seng added 0.3 per cent while South Korea's KOSPI rose 0.5 per cent. Japan's Nikkei also joined the party, gaining 1.4 per cent to close at its highest since early December.
On Saturday, Mnuchin said a US-China trade agreement would go "way beyond" previous efforts to open China's markets to US companies and hoped that the two sides were "close to the final round" of negotiations.
Further whetting risk appetite, Reuters exclusively reported on Monday that US negotiators have tempered demands that China curb industrial subsidies as a condition for a trade deal after strong resistance from Beijing.
"We expect a relatively market-friendly US-China deal," Bank of America Merrill Lynch global economist Ethan Harris said in a note. "In our view, market and political concerns will constrain future fights. Think 'skirmishes' rather than 'major battles.'"
The rally in Asia follows on from strong finish on Wall Street on Friday as traders cheered Chinese data showing exports rebounded in March to a five-month high while new bank loans jumped by far more than expected. -Reuters