Asia: Stocks rally as traders cheer Trump-Xi meeting plan
ASIAN markets rallied on Friday after the White House confirmed President Donald Trump would meet China’s Xi Jinping next week, stoking optimism for a cooling of trade tensions between the economic superpowers.
The gains came as the surge in oil prices sputtered, having seen huge rises over the previous two days on news that Washington had imposed sanctions on two Russian crude giants in a bid to bring an end to the Ukraine war.
Equities have endured a volatile period after the US president sparked fresh trade war fears two weeks ago by threatening to hit Beijing with 100 per cent tariffs over its recent controls on rare-earth minerals, sparking tit-for-tat measures.
However, the row has calmed down since then, soothing nerves, and on Thursday White House Press Secretary Karoline Leavitt announced Trump would meet his Chinese counterpart on Oct 30, on the sidelines of the Apec summit in South Korea.
“I think we’re going to come out very well and everyone’s going to be very happy,” Trump said later Thursday regarding his sit-down with Xi.
The face-to-face will be the first since Trump returned to power in January.
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Equity traders gave big cheer to the news, with all three main indexes on Wall Street finishing well up and pushing back towards records.
And Asia was happy to pick up the baton.
Tokyo climbed more than one per cent, while Hong Kong, Shanghai, Seoul, Singapore, Wellington, Manila and Indonesia were also in positive territory.
Tech firms were again among the best performers, helped by a strong revenue forecast from chip giant Intel Corp.
Oil prices edged down slightly after soaring around eight per cent this week following Trump’s decision to hit Russia’s two largest oil companies, Rosneft and Lukoil, saying his peace talks with President Vladimir Putin were not going “anywhere”.
The move was joined by another round of measures by the European Union as leaders try to pressure Moscow to end its three-and-a-half-year invasion of Ukraine.
According to industry analysts, the two companies account for just over half of Russia’s oil output, and both also produce natural gas.
While observers said the move could tip the crude market into a deficit next year, they warned the impact depended on the effectiveness of enforcement.
“Seeing is believing here,” said National Australia Bank’s Ray Attrill.
“While the news has seen Brent crude rise from US$63 to US$66 a barrel (and from US$61 at the start of the week), the reality is likely to be that Russian oil will before too long continue to be exported in similar quantities as now, via ever-circuitous routes and elaborate disguises.”
The announcement came after Trump claimed India had agreed to cut its Russian oil purchases as part of a US trade deal. New Delhi has not confirmed that.
Shares in Hong Kong and Shanghai were also helped by a pledge by China’s leadership to “vigorously boost consumption” and “consolidate national security” in the next five years, following a four-day, closed-door meeting.
The talks came as Beijing struggles to kickstart growth in the world’s second-largest economy, which has been hammered by sluggish domestic spending, a protracted crisis in the property sector and the US trade war.
Investors are now keenly awaiting the release later in the day of US consumer price data, which has been delayed by the government shutdown in Washington.
But while the reading will be closely watched owing to its implications for Federal Reserve policy, markets widely expect the central bank to cut interest rates again when it meets next week. AFP
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