Asian stocks: China’s trade-positive step adds to the market’s risk-on
- China announced to cut tariffs on some of the US products by half.
- Wall Street benchmarks surged to the record highs the previous day, Coronavirus keeps spreading.
Asian equities keep the gains as a trade-positive step from China adds strength to the share market’s earlier optimism based on broadly positive fundamentals. Among them, strong economic from the US, EU and the UK as well as China’s efforts to support the market amid coronavirus fears acquire front seats.
During early Thursday, China crossed wires, via Reuters, while saying that
the tariffs on some US goods will be cut to half. The action could be to gain US support during phase-two talks as the coronavirus is likely to push Beijing off promises made during the phase-one agreement.
Elsewhere, coronavirus has so far claimed more than 540 lives in China while infecting +28,000. Even so, Chinese authorities stay ready to infuse markets and fight against the challenge. On the data front, key activity numbers and the early signals to the US employment data flashed upbeat signals on Wednesday.
While portraying optimism, the MSCI’s index of Asia-Pacific stocks ex-Japan rises nearly 1.7% whereas Japan’s NIKKEI gains more than 2.5% to 23,905 by the press time of the pre-European session on Thursday. Further, stocks in China and Hong Kong are more than 1.0% in gains whereas Indian equities await the Reserve Bank of India’s (RBI) monetary policy decision for fresh impulse.
The US 10-year treasury yields add three basis points (bps) to 1.68% by the time of writing. This inflates the bond coupon’s three-day gain to 17 bps.
Traders will now keep eyes on the US reaction to the Chinese announcement as well as economic calendar ahead of the key jobs data from the US on Friday.