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Nikkei Markets

Asian stocks rebound after Trump softens trade war comments

WH Group, China Communications Construction pace A300 gains

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rebounded Tuesday after President Donald Trump took a conciliatory tone on U.S.- China trade.

The Nikkei Asia300 Index added 0.2% to close at 1,217.03, recovering from yesterday's 1.6% plunge.

The rebound came after Trump, in a Twitter post, praised Chinese President Xi Jinping and his representatives for wanting to resolve the ongoing conflict and said talks between the two countries were continuing. He was referring to comments by Chinese Vice Premier Liu He yesterday that Beijing was willing to resolve the trade conflict through "calm" negotiations. Additionally, at a G7 summit in France, Trump indicated that a trade deal with China was possible, saying he believed Beijing was sincere in its desire to reach an agreement.

The trade conflict between the two major economies intensified last Friday after China said it will impose additional levies on U.S. imports, and Trump responded by increasing the tariff rate on the Asian nation's shipments.

The S&P 500 Index had tumbled 2.5% on Friday amid the latest escalation in the trade dispute. It rebounded about a percent yesterday.

DBS Bank said that investor sentiment has pulled back "from the brink" on news that China-U.S. trade talks are still ongoing. Traders viewed this as a step down from the escalation that took place on Friday, it added.

The Chinese yuan extended losses on Tuesday despite the improved risk appetite. The People's Bank of China fixed the daily yuan reference rate at 7.0810, weaker than yesterday's 7.0570.

Chinese meat and food processing company WH Group, which has significant business interests in U.S., advanced 4.6%.

China Construction Bank led mainland stocks higher, adding 0.5%. China Overseas Land & Investment was the other top performer, closing 0.6% higher.

China Communications Construction rose 2.6% after first-half value of new contracts rose 15.9% on-year.

Instant noodle maker Tingyi Holding slumped 6.8% after reporting a 1.6% decrease in revenue for the January-to-June period. Profit in the period increased 15.1% on-year.

Sime Darby closed 1% higher after the Malaysian conglomerate reported a 12.9% increase in fourth-quarter net profit.

-- Nimesh Vora

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