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Global Markets: Asian shares rally on Sino-U.S. trade truce, oil bounces

Reuters  |  SYDNEY/TOKYO 

By and Hideyuki Sano

SYDNEY/TOKYO (Reuters) - Asian shares rallied on Monday after U.S. and Chinese leaders brokered a truce in their trade conflict, a relief for the global economic outlook and a tonic for emerging markets.

Trade-exposed currencies led the early gains, with the Australian dollar notching a four-month peak, while the dollar dropped to one-month lows against the yuan.

E-Mini futures for the S&P 500 climbed as much as 1.9 percent. MSCI's broadest index of shares outside was up 1.8 percent.

China's CSI300 index of and shares rose 2.6 percent. In Japan, Nikkei gained 1.3 percent to a six-week high.

"Markets are opening with a knee-jerk boost to risk appetite but time will tell how enduring the optimism proves to be," said "There are already very different takes on what was achieved at the meeting."

"But for now, both sides can claim a win," she added. "Perhaps not insignificantly, it provides a window to export the soybean crop from key Republican states, at least."

and the agreed to halt additional tariffs in a deal that keeps their trade war from escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching a deal within 90 days.

The said on Saturday that told Chinese during high-stakes talks in that he would not boost tariffs on $200 billion of Chinese goods to 25 percent on Jan. 1 as previously announced.

"Deeply contentious thornier structural issues such as remain unresolved," cautioned

"This U.S.-agreement is thus better characterised as a 'mini-breakthrough' that puts a momentary pause on trade tensions rather than a comprehensive policy deal."

Investors chose to see the glass as half full and lifted the Aussie dollar 0.75 percent to $0.7360 .

The greenback eased against a basket of currencies to 96.993 , but also firmed on the yen to 113.57 . The euro added 0.3 percent to $1.1345 .

The Mexican peso jumped more than 1 percent to 20.185, helped also by reports that newly sworn-in Mexican Andres Manuel Lopez Obrador may reverse his earlier plan to cancel construction of a new airport in the country's capital.

The dollar had come under pressure last week when comments by Federal Reserve were interpreted by markets as hinting at a slower pace of rate hikes.

Powell was scheduled to testify on Wednesday to a congressional But the hearing is expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honour of former U.S. President George H.W. Bush, who died on Saturday at the age of 94.

Treasuries rallied hard late on Friday to leave 10-year yields down at 2.99 percent before bouncing back to 3.035 percent early on Monday.

The progress on Sino-U.S. trade and an easier dollar could provide some support to commodity prices.

Oil posted its weakest month in more than 10 years in November, losing more than 20 percent as global supply outstripped demand.

Speculation is high the Organization of the Petroleum Exporting Countries (OPEC) and would agree some form of production cut at a meeting in on Thursday.

Brent futures rose $2.40 to trade at $61.86 a barrel, while U.S. crude gained $2.28 to $53.21.

(Additional reporting by in TOKYO; Editing by and Sam Holmes)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 08:15 IST
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