Hong Kong (AFP) – Asian markets rallied Tuesday after Chinese President Xi Jinping eased worries over a simmering US trade conflict by promising new measures to open his country’s massive economy “wider and wider”.
In a closely watched speech at the Boao Forum — dubbed the Asian Davos — he pledged a “new phase of opening up”, adding that Beijing “does not seek a trade surplus” and wants to boost imports.
After starting the day cautiously, dealers pounced on the comments as a sign that a possible trade war between the world’s top two powers can be averted.
Markets have been roiled in recent weeks as the White House has announced a series of tariffs mostly on Chinese goods as part of his “America First” protectionist agenda, fuelling fears of potentially devastating tit-for-tat measures that could hammer the global economy.
China’s massive surplus with the US is a key complaint of Trump’s who accuses the country of unfair trade practices that hurt American jobs.
His latest measures on Friday battered US stocks, though hopes the issue can be resolved saw Asia post gains on at the start of this week.
“Xi’s speech sends a positive signal to the market since he backs globalisation and the opening up of China market,” Linus Yip, a strategist at First Shanghai Securities, told Bloomberg News.
“Investors were very worried about trade disputes, while his speech calms the nerves a lot. The concern about trade disputes in near-term are still here however, since what Xi pictures is a very long-term picture.”
– Fresh Trump probe woe –
Shanghai climbed 0.5 percent, Hong Kong jumped 0.9 percent and Tokyo added more than one percent by the break.
Sydney — where a number of firms are listed that rely on China trade — rose 0.8 percent, Singapore put on 0.2 percent and Seoul added 0.3 percent.
There were also healthy gains in Wellington, Taipei and Indonesia.
After last week’s plunge, all three main indexes on Wall Street ended in positive territory Monday but eased from earlier highs after it emerged the FBI had raided the offices of Trump’s long-time personal lawyer.
Michael Cohen has admitted to paying porn actress Stephanie Clifford $130,000. Clifford, who goes by Stormy Daniels, claims she received the money to cover up a sexual encounter with Trump more than a decade ago.
The move is the latest volley in special counsel Robert Mueller’s probe into possible Russia collusion with Trump’s presidential campaign.
It adds to the sense of turmoil on Pennsylvania Avenue and Trump slammed the raid as “disgraceful”, a “witch-hunt” and “an attack on our country”.
Adding to uncertainty for traders are geopolitical worries after an alleged toxic gas attack that killed dozens in a rebel-held Syrian town, which prompted Trump to indicate a decision could be taken imminently on military action.
Russia, which backs the Syrian regime, has warned against such a move, saying it could have “grave repercussions”.
Tensions in the Middle East have buoyed oil prices, which extended Monday’s rally, with gains also helped by speculation the US will tear up the Iran nuclear deal.
– Key figures around 0300 GMT –
Tokyo – Nikkei 225: UP 1.1 percent at 21,913.06 (break)
Hong Kong – Hang Seng: UP 0.9 percent at 30,487.50
Shanghai – Composite: UP 0.5 percent at 3,154.18
Euro/dollar: DOWN at $1.2311 from $1.2318 at 2100 GMT
Dollar/yen: UP at 107.20 yen from 106.75
Pound/dollar: DOWN at $1.4123 from $1.4127
Oil – West Texas Intermediate: DOWN 15 cents at $63.27 per barrel
Oil – Brent North Sea: DOWN 13 at $68.52 per barrel
New York – Dow: UP 0.2 percent at 23,979.10 (close)
London – FTSE 100: UP 0.2 percent at 7,194.75 (close)