(Hong Kong) AFP: Asian markets rose yesterday as Donald Trump struck an upbeat note on trade talks with China, while the pound held steady after British MPs voted to delay Brexit.
While there remain some concerns about the global outlook, investor confidence has been supported by ongoing optimism that the world’s two biggest economies will eventually hammer out a deal to end their long-running trade row.
The US president provided fresh cheer Thursday by telling reporters “we are doing very well with China talks”, adding that “we are getting what we have to get”.
He also said “one way or the other, we’re going to know over the next three to four weeks”.
His comments came as Chinese state media said phone talks had been held between Beijing’s top negotiator Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
Mnuchin said earlier Thursday he expects the deal to be finalised soon, but cautioned that the process is complex.
Trump had said he expected to hold a meeting in Florida with his counterpart Xi Jinping later this month but Bloomberg said that the “signing summit” had been pushed back a month as negotiators struggled to resolve their differences.
Yesterday, China approved a foreign investment law that will abolish the forced transfer of technology from foreign firms to local joint-venture partners, addressing a key point of anger in the White House.
And at the end of the annual session of the rubber-stamp National People’s Congress, Premier Li Keqiang promised not to let the world’s second-largest economy “slip out of a reasonable range” and pledging support such as interest rate cuts.
The developments lifted regional equities. Tokyo ended 0.8 percent higher, while Shanghai gained one percent and Hong Kong jumped 0.6 percent.
Singapore put on 0.1 percent and Seoul climbed one percent and Taipei was up 0.9 percent with Wellington, Mumbai and Jakarta also up. However, Sydney ended marginally lower.
While traders remain uneasy about the global economy, there is some optimism.
“There is a pretty good backdrop going forward,” said Margaret Patel, portfolio manager at Wells Fargo Asset Management.
“We’re in a low-inflation environment for the foreseeable future and that really changes the equation about equity values -- they can go higher. The Fed isn’t going to do much and inflation remains stubbornly low,” she told Bloomberg TV.
On currency markets the pound stabilised after a week that saw wild fluctuations as Prime Minister Theresa May suffered a series of embarrassing defeats in parliament as she struggles to push through her Brexit deal.
Having seen it thrown out for a second time Tuesday, she will get a third crack of the whip next week after lawmakers eventually agreed to ask Brussels for a delay to the March 29 deadline for leaving the EU.
If her agreement passes, then May will ask for an extension to June but if it is rejected by MPs again she could ask for a much longer delay. However, it will be up to the other member states to unanimously agree to an extension.
“If it fails again ... the Prime Minister will have to go to the EU Council next week and throw herself on the mercy of the leaders of the (other EU countries) and hope they are feeling generous,” said Michael Hewson, chief market analyst at CMC Markets.
In early trade London rose 0.4 percent, Frankfurt added 0.2 percent and Paris edged up 0.1 percent.