Asia stocks spiked Wednesday, following Wall Street’s rally on signs that US-China trade relations could be improving.
Hong Kong’s Hang Seng (HSI) index jumped nearly 2.6%, while the Shanghai Composite Index(SHCOMP) gained about 1%.Tokyo’s Nikkei (N225) ended the day up 1.7%, and South Korea’s KOSPI (KOSPI) rose 1.2%.
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US futures also climbed after US President Donald Trump told reporters that talks between the United States and China would start on Wednesday.
But analysts caution that the market upswing is probably temporary, given that concrete progress on a US-China trade deal is unlikely in the near term.
“Markets are reacting positively to the fact that at least both sides are willing to talk about trade, even if this is only likely to deliver a short-term boost,” ING economist Iris Pang wrote in a note.
Tuesday was also a good day for stocks. Global markets were helped by the possibility that the European Central Bank could inject the eurozone with an economic stimulus, along with Wall Street expectations for an eventual interest rate cut by the US Federal Reserve.
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The trade developments really kicked off a surge in the United States.Early in US trading, Trump tweeted that he had “very good” talks with China’s President Xi Jinping andthat the two leaders would have an “extended meeting” at the G20 summit in Japan later this month.
A short time later, Xi echoed Trump’s upbeat tone, saying that China and the United States should push for “positive outcomes” at the summit of world leaders, in order “to inject confidence and vitality into the global market,” according to China’s state news agency Xinhua.