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Stocks Gain On US-China Trade Hope,HK Extradition Law Withdrawal

Stocks Gain On US-China Trade Hope,HK Extradition Law Withdrawal

David Cottle, Analyst
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Asian Stocks Talking Points:

  • All major indexes were well into the green
  • Chinese commerce ministry said talks with the US next month are on
  • The withdrawal of controversial extradition legislation calmed nerves in Hong Kong

Find out what retail foreign exchange investors make of your favorite currency’s chances right now at the DailyFX Sentiment Page

Asia Pacific stocks benefitted from a rare bout of broad-based optimism Thursday which saw strong gains across the region.

Investors had their first full day to react to Wednesday’s news that Hong Kong was to withdraw controversial extradition legislation which had formed the backdrop to much of the past month’s protest in the territory. The Hang Seng was up 0.4% as its afternoon session got under way.

There was more cheer on the US-China trade front too. China’s Commerce Ministry issued a statement on Thursday morning saying that Liu He, the country’s top negotiator, spoke with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Agreement has been reached on another round of talks in Washington at the start of October, with preliminary consultations in mid-September, the statement said.

This news sent US stock futures up and saw the Nikkei 225 up by 2.3% and and the Shanghai Composuite in the green by 1.5%. In Australia the ASX 200 added 0.7%, with the Big Four banks leading the way higher. TPG Telecom also made big gains after the release of its full-year results.

Foreign exchange markets saw a familiar ‘risk on’ flip awau from the caution of recent sessions. Growth sensitive units like the Australian and New Zealand Dollars did better while the haven of the Japanese Yen was much less in demand.

Gold prices retreated a little, in response to the same impetus but they remain very close to six-year highs.

Spot Gold, Daily Chart

The overall daily-chart uptrend channel in place since June looks safe despite the current better market mood.

The coming US session will bring plenty of potential market-moving news points, with durable goods order data and the non-manufacturing survey from the Institute for Supply Management prominent among them.

Asian Stocks Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter @DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.