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(Bloomberg) – The announcement that the United States and China are about to conclude a trade deal that will lift most or all of the US tariffs has done little to bring animal spirits to the fore. Asian traders. But when China said that a "substantial progress" had been made, it seemed to do the deal.
The MSCI Asia-Pacific Index gained momentum around 11:24 am in Hong Kong, as shares in China raised their advance to more than 2.6% before the break. While earnings declined in the afternoon, the Shanghai Composite Index closed above the 3,000 level for the first time since June.
Chinese equities have gained $ 1.1 trillion since early February. With a value of $ 6.78 billion at Friday's close, the $ 7 trillion mark is getting closer.
A sticking point in the negotiations – intellectual property – seems to be being tackled, with a new Chinese foreign investment law aimed at strengthening its protection.
Trade negotiations have constantly preoccupied investors because the war between the United States and China has shown its damage. A pair of horrible prints from Taiwan and South Korea on Monday, is only the last sign with regard to not only China, but many heavily exporting region economies, which means that a resolution could be a great victory for all.
Chinese leaders will meet this week in Beijing to clarify the country's priorities for the year and the economic development goals. And remember that as of May, MSCI Inc. will begin the process of increasing the exposure of its gauges to so-called A shares, which means that China will have a greater impact on the equity benchmark. of the region.
Asian markets have already benefited significantly from trade negotiations, with the 8.2% rebound in the MSCI Asia-Pacific index during the first two months of the year having been its best start since 2012. Nick Twidale, director of operations for Rakuten Securities Australia Pty, says, "We seem to be in a much better place than a week ago." And now, what the market wants to keep is the details.
"No market is ever on the shelf and does not collapse, so there is no immediate retracement in sight," said Stirling Larkin, chief investment officer at Australian Standfirst Asset Management, on Bloomberg Television. "This implicitly means that we are going to see a rise, a recovery in the stock markets and possibly a retracement from there. So, you stay in the continental stock exchanges, you stay in the S & P 500 if you think there is steam, otherwise you start to rotate now. "
As Mark Cudmore, macroeconomic strategist at Bloomberg, points out in Monday's live trading, the MSCI All-Country World index is still set to climb by 8% to a new record. Is a signed commercial agreement worth as much? We will see.
Stock Summary
MSCI Asia-Pacific index up 0.4%, Japanese index Topix up 0.7%; Nikkei 225 up 1%, Hang Seng Hong Kong index up 0.5%; Hang Seng China Enterprises up 0.6%; Shanghai Composite up 1.1%; CSI 300 up 1.2%, down 0.4% for the Taiex index in Taiwan Down 0.2% for the Kospi index in South Korea; Kospi 200 down 0.5% in Australia, S & P / ASX 200 up 0.4%; The S & P / NZX 50 index of New Zealand, up 0.7%. Futures on India SGX Nifty 50 are down 1.1%. KLCI of Malaysia down 0.4%; Philippine Stock Exchange Index up 0.4%; Jakarta Composite down 0.2%; Thailand SET down 0.3%; Vietnam's VN Index up 1.5% S & P 500 e-mini futures are up 0.4% after the 0.7% closing of the index in the last session .
– With the help of Matthew Burgess and David Ingles.
To contact the reporter about this story: Eric Lam in Hong Kong at [email protected]
To contact the makers of this story: Christopher Anstey at [email protected], Cecile Vannucci, Divya Balji
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