Asian Markets Bounce On Talks Hopes After Trump Tariff Threat 18 September 2018
Mohammad Ali (@ChaudhryMAli88) Published September 18, 2018 | 04:35 PM
Asian markets mostly rose Tuesday after Donald Trump said he would thump China with another round of tariffs but give some room for talks before jacking them up to the highest rate.
Hong Kong, (UrduPoint / Pakistan Point News - 18th Sep, 2018 ) :Asian markets mostly rose Tuesday after Donald Trump said he would thump China with another round of tariffs but give some room for talks before jacking them up to the highest rate.
The latest volley from the White House will see $200 billion worth of goods taxed at 10 percent from September 24, going up to 25 percent from January 1 if the sides are unable to hammer out a deal.
Trump also warned that another $267 billion had been lined up if Beijing retaliates.
With $50 billion of goods already being hit, that would mean Washington will have subjected virtually all goods China ships to the US to tariffs.
China on Tuesday warned it would "take countermeasures", adding that the "US insists on increasing tariffs, which brings new uncertainty to the consultations between the two sides".
After an early sell-off, Asian markets enjoyed a bounce on hopes officials from the world's top two economies will be able to thrash out an agreement before the end of the year.
The optimism has been boosted by the fact Trump left off some key items from the latest target list, while he is also due to meet Chinese President Xi Jinping in November and will likely want a deal in place.
"While the US tariffs salvo is hardly middling, it's not as bad as it could have been, so unless China hits with draconian measures, markets should remain supported after this morning's knee-jerk reactions," said Stephen Innes, head of Asia-Pacific trading at OANDA.
"Ultimately the graduated tariff hike allows more room to negotiate before the thumping 25 percent levy gets triggered, so perhaps China may temper their response accordingly.
" By the end of the day Shanghai had rallied 1.8 percent and Tokyo was up 1.4 percent while Hong Kong gained 0.6 percent. Seoul gained 0.3 percent and Wellington put on 0.5 percent.
However, Sydney dipped 0.4 percent and Singapore 0.1 percent.
"There were investors who'd been thinking a 25 percent tariff in one go is a possibility," Shogo Maekawa, a global market strategist with JPMorgan Asset Management, said. "It could be considered something good in this realm of bad things." Regional currencies also saw an afternoon recovery having been in the red earlier. The Yuan was flat, while the South Korean won and the Australian Dollar were 0.3 percent higher.
The Mexican peso gained 0.2 percent, the Russian ruble edged 0.3 percent higher and South Africa's rand put on 0.4 percent.
However, Indonesia's rupiah fell 0.2 percent as it wallows around levels last seen in 1998 during the Asian financial crisis.
In early trade London was flat, Paris added 0.4 percent and Frankfurt rose 0.3 percent.
- Key figures around 0810 GMT - Tokyo - Nikkei 225: UP 1.4 percent at 23,420.54 (close) Hong Kong - Hang Seng: UP 0.6 percent at 27,084.66 (close) Shanghai - Composite: UP 1.8 percent at 2,699.95 (close) London - FTSE 100: FLAT at 7,299.55 Euro/dollar: UP at $1.1688 from $1.1685 at 2040 GMT Pound/dollar: DOWN at $1.3137 from $1.3159 Dollar/yen: UP at 112.01 Yen from 111.83 yen Oil - West Texas Intermediate: DOWN 14 cents at $68.77 per barrelOil - Brent Crude: DOWN 31 cents at $77.74 per barrelNew York - Dow Jones: DOWN 0.4 percent at 26,062.12 (close)
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