The escalation of global stocks also occurs in Asia following the easing of tension of the US-China trade war. Accordingly, the tension eases as the US President Donald Trump called China’s President Xi Jinping “a great leader.”
Trump stated that, on Monday, Chinese officials had contacted him to negotiate more and restart the trade talks. Trump’s good comments on the issue kind of stopped the escalation of the tension, thus leading the rise on hopes of Asia stocks.
However, Tao Wang, the chief China economist for UBS, said that Trump’s moves are unpredictable. “Going forward, it is not clear to us what may lead the U.S. administration to stop the escalation and try to reach a deal with China,” she explained.
As for the stocks, CNA reported that MSCI’s broadest index of Asia-Pacific shares, excluding Japan, was up 0.3%. Prior to the rise, it was dropping by 1.3%.
Furthermore, others also experienced the rise. Japan’s Nikkei gained 1.1% rise. The Shanghai Composite Index got around 1%. South Korea’s KOSPI was up 0.4%.
Although equity markets have stood firmly for the time being, long-term condition remains unpredictable.
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Previously on US-China Trade War
Prior to this event, the skyrocketing trade war set the tone for global stocks, including Asia’s. The US and China kept imposing additional tariffs on export and import rates from and to each other.
On one hand, Washington gave another 5% tariffs on Chinese imports. Indirectly, Trump was ordering US companies to stop business with Chinese companies.
On the other hand, Beijing imposed an additional tariffs on US$ 75 billion worth of American goods. These included soy beans, cars, oil, and so forth.
“There is still a large element of uncertainty regarding the U.S.-China trade dispute. It remains difficult to foresee a resolution, and this will continue to weigh on equity market sentiment,” stated Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.
Despite the situation, China keeps showing the willingness to talk as stated by Liu He, China’s top negotiator.
“We are willing to resolve the issue through consultation and cooperation with a calm attitude and we resolutely oppose the escalation of the trade war,” he said.
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