HONG KONG―Asian markets enjoyed another rally on Friday after Donald Trump hailed positive talks with Chinese President Xi Jinping and a report said he had asked officials to draw† up a draft bill as he eyes a potential trade deal between the two.
Hong Kong jumped almost four percent in the afternoon, while Shanghai and the yuan soared as dealers seized on the news, hoping for a breakthrough in a standoff that has rocked global equities and fueled warnings about global growth.
The gains follow a third straight advance on Wall Street as a sense of optimism returns after a diabolical October, with riskier, higher-yielding currencies enjoying a bounce against the dollar, and the pound holding on to most gains.
Hong Kong and Shanghai were already buoyant after Beijing said it would introduce measures to kickstart the stuttering economy following a string of weak data, including growth at its slowest pace in nine years during the third quarter.
The yuan also rallied to 6.9080 to the dollar, having hit 6.9302 earlier in the morning and is well off the 10-year lows around 6.97 on Thursday.
The optimism spread across the region. Tokyo was up 2.7 percent in the afternoon, Singapore 1.3 percent and Seoul piled on three percent, while Sydney reversed early losses to sit 0.1 percent higher.
Taipei, Bangkok, Mumbai and Jakarta also posted healthy gains.
“Positive comments from President Trump over US-China trade tension are cheering the market in the short term,” said Tai Hui, chief market strategist for Asia Pacific at JP Morgan Asset Management.
The day had already started with a bang after Trump tweeted that he had held positive talks with Xi, which was a rare sign of hope in the months-long stand-off between the world’s top two economies.
“Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade,” he wrote.
He added that trade talks were “moving along nicely” and meetings were “being scheduled” at the G20 summit in Buenos Aires at the end of the month.
The comment comes days after Trump warned he would impose tariffs on all China’s shipments to the US before saying he thought he could “make a great deal with China” but it was not yet ready.
Later, Bloomberg News, citing unnamed sources, reported that the president has requested key cabinet secretaries put together an outline deal to call a ceasefire in the painful row. It said several agencies had been called in to help with putting the plan together.