Asia markets gain amid hopes of progress as US-China trade talks conclude
Japan’s Nikkei 225 advanced 1.1 percent to close at 20,427.06 while the Topix also gained 1.1 percent to finish its trading day at 1,535.11, with almost all sectors rising.
South Korea’s Kospi gained nearly 2 percent to close at 2,064.71. Shares of industry heavyweight Samsung Electronics advanced 3.94 percent and steelmaker Posco rose 4.07 percent. Shares of chipmaker SK Hynix also soared 7.43 percent.
Australia’s benchmark ASX 200 rose nearly 1 percent to close at 5,778.3, with all sectors advancing. The energy subindex added 1.94 percent as oil stocks mostly gained; shares of Santos rose 1.4 percent, Woodside Petroleum higher by 2.25 percent and Beach Energy surged 5.17 percent.
The moves in the oil sector Down Under came on the back of Tuesday’s strong gain in oil prices, with the rally extending into Wednesday. In the afternoon of Asian trade, international benchmark Brent crude futures gained 1.14 percent to $59.39 per barrel while U.S. crude futures advanced 1.23 percent to $50.39 per barrel.
Asia-Pacific Market Indexes Chart
|NIKKEI||Nikkei 225 Index||NIKKEI||20427.06||223.02||1.10|
|HSI||Hang Seng Index||HSI||26462.32||586.87||2.27|
|ASX 200||S&P/ASX 200||ASX 200||5778.30||0.00||0.00|
|CNBC 100||CNBC 100 ASIA IDX||CNBC 100||7553.96||154.89||2.09|
The mainland Chinese markets also saw gains on Wednesday, with the Shanghai composite rising around 0.71 percent to close at about 2,544.34 while the Shenzhen composite advanced 0.543 percent to finish its trading day at approximately 1,306.95. The Shenzhen component also climbed up by 0.761 percent to close at 7,447.93.
Meanwhile, Hong Kong’s Hang Seng index jumped more than 2.1 percent, as of its final hour of trade. Shares of Chinese tech juggernaut Tencent soared more than 3 percent.
Electronics company Xiaomi, on the other hand, saw its stock drop about 6 percent after J.P. Morgan slashed its price target on the stock. Expressing confidence in the stock’s long-term value, Xiaomi announced Wednesday that its controlling shareholders “shall not dispose of any shares of the Company directly or indirectly beneficially owned by them” for the next 365 days.
One analyst said markets are holding on to optimism over the extended trade talks.
“It is not over until the fat lady has sung,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a morning note.
“First, a joint statement ... after this round of talks are concluded will perhaps be a more meaningful gauge on what both sides have tentatively agreed on,” Varathan said. “Second, even if a deal is cobbled together, the more strident trade hawks in the White House and Trump may not sign off. And we have watched that movie before.”
“Finally, there is a nagging sense that a preliminary agreement here is likely to fall short of the “comprehensive deal” Trump banged on about at the G20,” he added.
The new round of talks began on Monday as the two countries seek to strike an agreement amidst the ongoing trade war, which saw the U.S. and China slap punitive tariffs on each other’s goods.
The Japanese yen, widely seen as a safe-haven currency, traded at 108.97 against the greenback after seeing an earlier high of 108.66 yesterday. The Australian dollar was at $0.7155 after seeing lows above $0.711 in the previous session.
— Reuters and CNBC’s Fred Imbert contributed to this report.
Europe stocks close higher as China-US trade talks wrap up; Taylor Wimpey up 6%
European Markets: FTSE, GDAXI, FCHI, IBEX
Looking at some individual stock performances, AMS, a European supplier of Apple, recovered some losses after starting the day in the red. A report from Japanese publication Nikkei on Wednesday said that the iPhone maker had reduced production for three new iPhone models in the first quarter.
U.K. housebuilders traded higher following a trading update by Taylor Wimpey, in which the firm forecast solid sales for 2019. The stock rose more than 6 percent on the back of the announcement. Persimmon and Barratt Developments were both up by 3.2 percent. Furthermore, France’s Seb surged 10 percent after announcing the acquisition of the Californian coffee brewer Wilbur Curtis.
Stateside, stocks rose for a fourth consecutive day as investors remained positive that a deal would come out of the trade talks between the U.S. and China, which concluded on Wednesday. U.S. negotiators said in a statement that they discussed “China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.”
However, the ongoing partial U.S. government shutdown, which entered its 19th day on Wednesday, threatened to weigh on that sentiment, as Democratic lawmakers and President Donald Trump remain divided over the funding of the border wall.
Back in Europe, U.K. Prime Minister Theresa May’s Brexit Withdrawal Agreement suffered an early defeat on Wednesday as lawmakers voted for the government to swiftly come up with a plan B in case the deal is voted down next week. Sterling saw a modest rise against the dollar on the back of the news.
Dow posts 4-day winning streak as Fed meeting minutes confirm patience on rate hikes
The Dow Jones Industrial Average rose 60 points. The S&P 500 gained 0.3 percent as the tech and energy sectors outperformed. The Nasdaq Composite climbed 0.7 percent.
Equities pared gains in the last hour of trading as it appeared a meeting over the shutdown between President Donald Trump and Democratic leadership did not go well. The president tweeted the meeting was “a total waste of time.” Sen. Chuck Schumer said the president walked out of the meeting.
Peter Boockvar, Bleakley Advisory Group chief investment strategist, said the president’s tweet had a slight negative impact on the market. The market “hasn’t cared at all up to this point. I don’t know whether today is going to all of a sudden make them care. the market has gone straight up for a week. Up to this point they haven’t cared, and both sides dug in. I don’t think the market believes it’s going to have much of an impact,” Boockvar said.
The Fed minutes pointed to a backdrop of low inflation in the U.S., meaning the central bank can “afford to be patient about further policy firming.” They also indicated that some Fed officials think a “relatively limited amount” of rate hikes may be coming.
“All the minutes are doing is confirming what they had already hinted at,” said Larry McDonald, editor of The Bear Traps Report. “The Fed speak before the minutes was like a fire hose to calm down the markets.”
The minutes come after Fed Chairman Jerome Powell said last week the Fed would be “patient” with rising rates.
Investors also weighed the latest developments surrounding U.S.-China trade talks. Discussions over trade between mid-level officials from Washington and Beijing concluded on Wednesday. U.S. Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney said earlier on Wednesday that he thought negotiations “went just fine.” He added: “It’s been a good one for us. ”
Caterpillar rose 1.8 percent. The stock, along with Boeing’s, is largely seen as a bellwether for trade because of the company’s exposure to overseas markets.
Damir Sagolj | Reuters
The meetings this week were the first between U.S. and China officials since President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce in December to the two countries’ ongoing trade war. Both countries have been engaged in a tense sparring of tariffs, targeting billions of dollars’ worth of imports in each other’s economies with levies.
Ed Yardeni, president and CIO of Yardeni Research, said China could move quickly to strike a deal with the U.S. to avoid further economic pain.
“Lately, it seems to have gotten so bad for China domestically that it may have no choice but to make a trade deal in favor of the US, which could be a boon to US and global equity markets,” Yardeni said in a note. “More evidence recently has confirmed my earlier hypothesis about China’s weakness,” he added, citing Apple’s quarterly revenue warning from last week as well as deteriorating leading indicators like purchasing managers’ indexes.
The recent tone shift around U.S.-China trade talks has helped boost stocks recently. On Tuesday, the Dow notched its first three-day winning streak since late November.
However, investors also kept an eye on the ongoing government shutdown. Ratings agency Fitch warned Wednesday it may cut the U.S.′ triple-A rating if the shutdown continues.
President Donald Trump delivered an address on immigration and border security Tuesday night, where he made his case for the proposed wall along the U.S.-Mexico border, a key sticking point inhibiting progress toward a funding deal to re-open the government.
“I think things are going to be relatively choppy, but everybody had gotten so negative on the market, specifically a lot of the FAANG names,” said Dave Lutz, head of ETF trading at JonesTrading. “But we’re all headline-trading right now. If anyone told you what’s going to happen a few months from now, they’re making stuff up.”
—CNBC’s Ryan Browne and Patti Domm contributed to this report.