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Asia: Markets push on with rally after US-Mexico trade deal
[HONG KONG] Asian investors extended a rally on Tuesday, tracking another Wall Street record as investors cheered a fresh trade deal between the United States and Mexico that brings an end to one row picked by Donald Trump that had rattled global markets.
The agreement raises hopes the two-decade-old North American Free Trade Agreement, torn up by the White House soon after Mr Trump's election, can be salvaged after Canada rejoins talks on Tuesday.
The pact was described by the US president as "a big day for trade" and it sent the S&P 500 and Nasdaq to fresh all-time highs, while the Dow broke 26,000 for the first time since January.
Monday's agreement comes after officials from Washington and Beijing held talks last week aimed at easing trade tensions that have seen them hit each other with tariffs on tens of billions of dollars worth of goods.
While the meeting did not achieve any breakthrough, the fact they took place was seen as a good sign.
Stephen Innes, head of Asia-Pacific trading at Oanda, said dealers were "in a festive mood" as the deal removed "one major hurdle that has been haunting North American investors for months".
He added: "Markets are revelling in any trade positives... After all, a deal is a deal."
Equities, which enjoyed a healthy run after Federal Reserve boss Jerome Powell indicated Friday the bank would not aggressively lift interest rates, continued to rise.
Tokyo went into the break 0.6 per cent higher with Toyota surging almost two per cent after saying it will invest about US$500 million into Uber as part of a deal to work on mass-producing self-driving vehicles.
Hong Kong added 0.5 per cent and Shanghai rose 0.2 per cent.
Sydney climbed 0.7 percent and Singapore was 0.8 per cent higher, with Seoul adding 0.4 per cent and Taipei 0.6 per cent stronger.
Manila, Wellington and Jakarta were also sharply higher.
The more upbeat outlook helped high-yielding currencies. Mexico's peso jumped more than one per cent on the news but struggled to maintain the gains on Tuesday, though the Canadian dollar was up 0.8 per cent.
South Korea's won, the Australian dollar and the South African rand also enjoyed solid buying.
The Turkish lira fell 1.7 per cent to around 6.2 against the dollar as the country's markets reopened after a week-long holiday, with dealers continuing to fret over the financial crisis in the country.
The euro dipped by managed to hold gains that came on the back of data showing business confidence in the German economy, Europe's biggest, bounced back as fears over a US trade war eased.