HONG KONG: A wave of optimism flowed across Asian markets on Tuesday, tracking a surge on Wall Street, as fears of a US-China trade war receded.
Speculation that Kim Jong Un was on a surprise secret visit to Beijing also lifted spirits -- and the South Korean won -- as the North Korean leader prepares for possible nuclear talks with Donald Trump.
The gains on all markets chipped away at the sharp losses suffered last week in response to the White House's decision to hit China with billions of dollars in tariffs.
That came weeks after Washington announced levies on steel and aluminium imports -- which have since been postponed for some countries -- and sparked talk of a trade war that could batter the global outlook.
However, nerves have been soothed this week as it emerged that high-level talks had been taking place between the world's top two economies to find an agreement.
"Our base case is that there won't be an all-out trade war," Craig Macdonald, at Aberdeen Standard Investments, told Bloomberg News. "It's a way of applying pressure to get some wins by Trump."
However, he said there would likely still be some volatility down the line, adding: "Our sense is that they will get some wins rather than all-out war, but it's not something you can just dismiss. The tail risk is higher."
US markets surged, with the Dow and S&P 500 almost three percent higher and the Nasdaq piling on 3.3 percent -- its biggest one-day rise since August 2015.
Those strong performances continued in Asia, with Tokyo closing 2.65 percent higher thanks to a drop in the yen against the dollar, as traders shift out of assets considered safe in times of uncertainty and turmoil.
- 'The nasty stick' -
Hong Kong added 0.8 percent and Sydney ended 0.7 percent higher. Singapore put on 0.4 percent and Wellington rose 0.9 percent, while Taipei, Manila and Jakarta were all healthily up.
Seoul rose 0.6 percent and the won climbed more than one percent against the dollar on speculation Kim was visiting Beijing. It would be his first trip outside North Korea since assuming power at the end of 2011.
If confirmed, the visit would mark the latest development in the fast-paced shift towards an easing of tensions on the Korean peninsula.
Shanghai ended up 1.1 percent. Chinese investors, known for their often bizarre and superstitious buying choices, sought to make a profit off the rumoured visit. Some firms with Jin in their name -- the Mandarin character for "Kim" is pronounced "Jin" and means "gold" -- soared.
And Changbai Mountain Tourism Co. Ltd surged by its 10 percent daily limit in Shanghai. Changbai is a peak along the China-North Korea border.
While it was up against the yen, the dollar took a hit against most other currencies as optimistic traders shifted to higher-yielding, riskier units.
"The dollar is getting whacked with the nasty stick, but hardly surprising as the bar for dollar strength remains incredibly low," said Stephen Innes, head of Asia-Pacific trading at OANDA.
The Indonesian rupiah, Thai baht, South African rand and Mexican peso were all higher. The Russian ruble sank after more than 100 alleged agents working under diplomatic cover were ordered out by 21 world governments.
The move came after Britain urged allies to respond to the poisoning of double agent Sergei Skripal this month.
The greenback did rise against the euro, having tumbled Monday on comments from German central bank chief Jens Weidmann that the European Central Bank should quickly wind down its crisis-fighting policies of ultra-low interest rates and massive bond purchases.
In early European trade London and Paris were both up more than one percent, while Frankfurt was 1.7 percent higher.
Comments
Comments are closed for this article.