Asian markets rally on perfect storm of positive news

agency, Mumbai
05/09/2019   0 Comments

Asian equities and currencies rallied Thursday, building on the previous day's advance as investors were cheered by a number of positive developments on trade, Hong Kong and Europe.

Markets were already on an upward trajectory after the leader of Hong Kong on Wednesday withdrew a controversial extradition bill that had sparked months of sometimes violent protests in the financial hub.

But the good news kept coming as the day wore on, with news that Italy had formed a new moderate, pro-European government, while British MPs moved closer to passing a law preventing a no-deal Brexit.

Then on Thursday morning, China announced it would resume trade talks with the United States in Washington next month.

Chinese Vice Premier Liu He spoke to US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin by phone Thursday morning, the commerce ministry statement said, and agreed to "work together and take practical actions to create favourable conditions for consultations".

The announcement provided a small sign of progress in the long-running row that has dragged on the global economy and stock markets.

Asian equities were all in positive territory, tracking a healthy lead from Wall Street, where the S&P 500 moved to within touching distance of a new record high.

Hong Kong added 0.4 per cent in the morning, having soared almost four percent Wednesday on the back of Chief Executive Carrie Lam's shock decision to withdraw the bill.

Tokyo went into the break more than two percent higher and Shanghai jumped 1.6 percent, with Sydney one percent up.

Seoul gained 1.1 per cent, Singapore 0.5 per cent, and Taipei and Wellington 0.9 percent apiece. Manila and Jakarta were also well in positive territory.

Adding to the positive vibe were comments from China's cabinet flagging a cut in the amount of cash banks must keep in reserve, a move aimed at releasing more cash into the stuttering economy.

"A full cut to banks' reserve ratio is needed to make sure of effective financial support to economic growth, as the global economy slows and domestic consumption and investment face headwinds," said Wen Bin, at China Minsheng Banking Corp.


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