Asia stocks rally on trade-thaw hopes

A man looking at an electronic board outside a brokerage in Tokyo, Japan, on Jan 7, 2019.
A man looking at an electronic board outside a brokerage in Tokyo, Japan, on Jan 7, 2019. PHOTO: REUTERS

SYDNEY (BLOOMBERG) - Asian stocks rallied on Wednesday (Jan 9) following gains in the US amid optimism on the potential for progress in trade talks between Washington and Beijing.

Equities in Hong Kong, South Korea and Japan led gains after all major US indexes climbed. US President Donald Trump is eager to strike a deal to boost financial markets that have been roiled by the trade war, according to people familiar. Earlier, he tweeted that talks are "going very well" as negotiations continued with China.

Japan's Topix index climbed 1.1 per cent as of 10:30am in Tokyo. Australia's S&P/ASX 200 Index rose 0.8 per cent while South Korea's Kospi index added 1.2 per cent.

Hong Kong's Hang Seng Index gained 1.4 per cent and the Shanghai Composite rose 0.4 per cent.

S&P 500 futures ticked 0.3 per cent higher. The S&P 500 Index rose 1 per cent.

Crude climbed above US$50 a barrel for the first time this year.

Developments in US-China trade relations remain a focal point at the same time as parts of the American government are shut down with lawmakers unable to agree on a budget proposal that Trump will sign. Trump will deliver a prime-time televised address on Tuesday evening about his demand for a wall along the Mexican border, which is at the heart of the dispute. Then comes the start of the earnings season, where investors' dialed back expectations for profit growth will be tested following last month's tumble in global equities.

"We could get some more stabilization and a floor in the market if we make strides towards an agreement" on trade, Kate Moore, chief equity strategist at BlackRock Inc, said on Bloomberg Television. "But this is going to be an issue overhanging markets I believe for multiple years."