Asian markets rose in early trading Friday following signs of hope for a thaw in the trade war between the U.S. and China.
The Wall Street Journal reported Thursday that China was seeking to narrow the scope of upcoming trade negotiations, hoping to resolve some key issues and break the months-long deadlock. Later, President Donald Trump said he would be open to a smaller-scale, interim trade deal. That came a day after Trump put off tariff hikes on $250 billion in Chinese goods for two weeks and China exempted more than a dozen U.S. products from new tariff hikes of its own.
Also Wednesday, the European Central Bank cut interest rates deeper into negative territory, as expected, raising hopes that the Federal Reserve may soon enact its own easy-money policies.
Japan’s Nikkei NIK, +1.02% gained 0.9% and Hong Kong’s Hang Seng Index HSI, +0.36% advanced 0.2%. Malaysia’s benchmark index FBMKLCI, -0.20% was about flat while stocks rose slightly in Singapore STI, +0.34% and Indonesia JAKIDX, +0.02% . Australia’s S&P/ASX XJO, +0.11% was about flat. Markets in mainland China, Taiwan and South Korea were closed for holidays.
Among individual stocks, Yahoo Japan 4689, +4.92% , SoftBank 9984, +3.05% and Fast Retailing 9983, +1.00% rallied in Tokyo trading. In Hong Kong, Sunny Optical 2382, +2.06% and Volvo parent Geely Automobile 175, +2.82% gained, while oil producer CNOOC 883, -1.01% slipped. Beach Energy BPT, +1.39% and Commonwealth Bank CBA, +0.68% rose in Australia.
“What’s driving markets today is the potential for an interim trade deal,” said Tony Roth, chief investment officer at Wilmington Trust on Thursday. “There’s enough pain to (China’s) domestic economy and there’s enough pain to our domestic economy that it’s in both presidents’ interests to take a step back and have a little bit of breathing room right now. That’s what’s changed.”
The S&P 500 index SPX, +0.29% rose 8.64 points, or 0.3%, to 3,009.57. The Dow Jones Industrial Average DJIA, +0.17% extended its winning streak to a seventh straight day, gaining 45.41 points, or 0.2%, to 27,182.45. The Nasdaq COMP, +0.30% added 24.79 points, or 0.3%, to 8,194.47. The Russell 2000 index of smaller company stocks gave up an early gain, sliding 0.65 point to 1,575.07.