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Confirmation of Sino-US Trade Negotiations Buoys Stocks, Traders’ Sentiments

Asian shares extended gains on Thursday, and the U.S. stock futures surged after China said it is going to hold trade negotiations with the United States in early October, showing hopes they can de-escalate their trade conflict before it causes further damage on the global economy.

MSCI’s broadest index of Asia-Pacific stocks outside Japan was up 1.08% at its highest since Aug. 2, while the Shanghai composite index grew 1.7%. Japan’s Nikkei supplemented 2.4%.

Pan-European Euro Stoxx 50 futures were up 1.01%, with Germany’s DAX futures up 1.04% and FTSE futures grew 0.64%.

The Chinese yuan plunged against the dollar in foreign trade, while safe-haven assets like gold, the Swiss franc, and the yen dropped.

China’s affirmation of trade negotiations added to upbeat geopolitical news overnight. A legislative vote in Britain put pauses the nation’s no-deal exit from the European Union, Hong Kong withdrew a controversial extradition bill that triggered recent protests, and political crisis in Italy appeared to be easing.

China’s Commerce Ministry said its trade staff would consult with their U.S. equivalents in mid-September in preparation for discussions in early October, hinting at progress in reducing trade spat.

Both sides had agreed to take real actions to create favorable conditions, the ministry added, without providing more details.

Any indication that the US and China are closer to resolving their trade war would lift a significant pressure from the global economy; however, many analysts believe the two sides are dug in for a longer and costlier fight.

Hong Kong shares beat early losses to rise 0.3%. They had inched up in afternoon session Wednesday after chief Carrie Lam said she was withdrawing an extradition bill that had sparked months of violent protests in the Asian financial hub.

Lam stated Thursday she hopes the formal withdrawal of a controversial extradition invoice and different measures will assist remedy the town’s political disaster.

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