Asia-Pacific Markets Rally as US and China Announce Trade Deal
In a significant move, Asia-Pacific markets surged on Monday following the announcement of a trade deal between the US and China. The deal includes a 90-day pause on tariffs and a reduction in reciprocal tariffs by 115 percentage points. According to CNBC, this development has brought a sense of relief to investors, with many markets in the region experiencing significant gains.
"The magnitude of this tariff reduction is larger than expected," said Tai Hui, APAC Chief Market Strategist at J.P. Morgan Asset Management, as quoted by CNBC. "This reflects both sides recognizing the economic reality that tariffs will hit global growth and negotiation is a better option going forward. The 90-day period may not be sufficient for the two sides to reach a detailed agreement, but it keeps the pressure on the negotiation process." Hui also added that investors would still be awaiting "further details on other terms of this agreement, for example, whether China would relax on rare earth export restrictions."
As reported by CNBC, Hong Kong stocks led gains in the region, with the Hang Seng Index surging 3.32% and the Hang Seng Tech index advancing 5.96% in their final hour. Mainland China’s CSI 300 index increased 1.16% to end the day at 3,890.60. Indian stocks also saw massive gains following the ceasefire between India and Pakistan over the weekend, with the benchmark Nifty 50 surging 3.25% and the BSE Sensex gaining 3.12%.
In other markets, Japan’s benchmark Nikkei 225 ended the day 0.38% higher at 37,644.26, while the broader Topix index added 0.31% to 2,742.08. In South Korea, the Kospi index advanced 1.17% to close at 2,607.33, and the small-cap Kosdaq moved up 0.4% to 725.40. Over in Australia, the benchmark S&P/ASX 200 pared gains to end the day flat at 8,233.50.
Meanwhile, US futures jumped as investors await further details on the trade deal between the US and China, according to CNBC. This comes after declines in the three key benchmarks on Wall Street in last Friday’s session. The 30-stock Dow Jones Industrial Average lost 119.07 points, or 0.29%, and settled at 41,249.38. The broad-based S&P 500 inched down 0.07%, closing at 5,659.91, while the Nasdaq Composite ended the session little changed, ending at 17,928.92.
The announcement of the trade deal has brought a sense of optimism to investors, with many markets in the region experiencing significant gains. As CNBC reported, the deal includes a 90-day pause on tariffs and a reduction in reciprocal tariffs by 115 percentage points. This development is expected to have a positive impact on global growth, and investors are eagerly awaiting further details on the agreement.
In conclusion, the trade deal between the US and China has brought a sense of relief to investors, with many markets in the Asia-Pacific region experiencing significant gains. As reported by CNBC, the deal includes a 90-day pause on tariffs and a reduction in reciprocal tariffs by 115 percentage points. With investors eagerly awaiting further details on the agreement, it remains to be seen how this development will impact global growth in the coming months.
