ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Nikkei Markets

Asian equities surge on brighter prospects of US-China trade deal

ECB signaling stimulus measures also buoys investor sentiment

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan jumped Wednesday, helped by increased prospects of a U.S.-China trade deal and the European Central Bank's hints about stimulus measures.

The Nikkei Asia300 Index of companies outside Japan advanced 2.2% to 1,299.42. Chinese companies were among the biggest winners on the gauge. Hong Kong shares of pork producer WH Group, which has significant business interests in the U.S., surged 5.3%. Air China led airlines higher, climbing 8.3%. Analysts said an improved outlook on the Chinese yuan on hopes of a U.S.-China trade deal boosted mainland airlines. Guangzhou Automobile Group paced the advance in carmakers, adding 5.8%, and China Life Insurance led financial companies higher, climbing 3.1%.

Asian equities were buoyed by U.S. President Donald Trump's comments on Twitter that he would have an "extended meeting" with Chinese President Xi Jinping next week at the G-20 summit in Japan. The meeting was confirmed by Xi, who reportedly said that he was willing to meet Trump and exchange views.

A meeting between the two leaders was earlier in doubt amid Trump's threat of imposing tariffs on more Chinese goods if Xi did not meet him at the G-20 summit and Beijing's refusal to confirm.

Further helping the risk appetite were remarks by ECB head Mario Draghi that in the absence of an improvement in economic indicators, the central bank's inflation target was being threatened. This, he added, may require additional stimulus in the form of a cut in interest rates or asset purchases. Following his comments, European equities and bonds gained yesterday.

"The prospects of a better growth outlook as trade relations improve, combined with a backstop from the ECB, forced underweight investors back into the market," Michael McCarthy, the chief market strategist at CMC Markets and Stockbroking, said. "The sudden shift in markets means the U.S. Federal Reserve announcement has even higher potential to influence trading."

The Fed, later Wednesday, is expected to adopt a dovish bias and indicate that it will likely cut interest rates next month.

In other movers on the A300, ZTE added 7.4%. The Chinese telecom equipment provider is currently banned by the U.S. from buying components and technology from American companies.

Want Want China Holdings rose 3.4%, extending Tuesday's 1.7% advance, after the food and beverage company reported an 11.6% increase in full-year profit. The company late Tuesday said its unit agreed to acquire egg producer Poyang County Linwang Forestry Development.

The improved likelihood of a trade deal lifted industrial commodity and oil producers. India's Vedanta rose 0.2% and Tata Steel advanced 4.6%, while CNOOC and China Petroleum & Chemical advanced at least 2.9% each.

Heavyweights Samsung Electronics, Tencent Holdings, and Taiwan Semiconductor Manufacturing Co. rose at least 2.3% each.

--Nimesh Vora

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media