HONG KONG • Most Asian markets rose yesterday after United States President Donald Trump showed signs of conciliation in his trade wars, but investors remain on edge over the China-US stand-off with some concerns that talks between the two have stalled.
Mumbai equities and the rupee soared after exit polls suggested business-friendly Prime Minister Narendra Modi was on course to be re-elected.
Sydney stocks and the Australian dollar rallied after a shock win for the conservatives, while Japanese dealers were cheered by forecast-beating economic growth data.
However, the British pound is wallowing around four-month lows on fears that Britain will leave the European Union without a divorce deal.
Global markets have been in turmoil for two weeks since Mr Trump threatened - and later delivered - a hike in tariffs on Chinese imports, to which Beijing retaliated, relighting their debilitating trade battle.
The move also threw a spanner in the works for long-running negotiations between the economic superpowers that were thought to have been close to conclusion.
That was compounded by Mr Trump's decision to bar Chinese telecoms firms from the US market and add Huawei to a blacklist restricting US sales to the firm.
But there was a sliver of hope after Mr Trump last Friday removed steel tariffs on Canada and Mexico and announced a six-month delay in imposing steep tariffs on auto imports as he seeks talks with Japan and the EU on the issue.
Most equity markets were in positive territory, with Sydney 1.7 per cent higher following the surprise victory of Prime Minister Scott Morrison's Liberal-National coalition in weekend elections. The Australian dollar climbed 0.7 per cent against the greenback.
Tokyo ended 0.2 per cent higher, with traders taking heart from news that the Japanese economy expanded more than expected in the first quarter and improved slightly from the previous three months.
Wellington added 0.5 per cent and Taipei was 0.1 per cent higher, with Jakarta 1 per cent up and Manila 0.6 per cent stronger.
But Hong Kong shed 0.6 per cent and Shanghai was off 0.4 per cent, with Seoul marginally down.
Still, Mr Michael Metcalfe, global head of macro strategy at State Street, said markets could be ready for a healthy bounce.
"Right now, cash levels are at quite elevated levels and investors have money to put back into the market," he told Bloomberg TV.
"That dry powder, that potential for cash to come back in, means that once we get a resolution of the trade war and once we start to see better economic data, as we've just seen in Japan for instance, then that money is going to get dragged back out of cash into the market."
Mumbai piled on more than 2 per cent and the rupee jumped 1 per cent as polls indicated Mr Modi's Bharatiya Janata Party and its National Democratic Alliance would win the general election that concluded on Sunday.
"The markets should see continuity and potential for reforms and foreigners are likely to be net buyers" of stocks, said Mr Jean-Charles Sambor at BNP Paribas Asset Management. "We see India as being under-owned."
In early trade, London rose 0.1 per cent, Paris dipped 0.2 per cent and Frankfurt eased 0.1 per cent.