Investing.com – Asian equities rebounded on Tuesday as reports that China and the U.S. are in talks to find a mutually agreeable way to reduce the trade deficit gap and avoid the $50 billion tariffs bolstered demand for riskier assets.
U.S. Treasury Secretary Steven Mnuchin reportedly said that he is “cautiously hopeful” that China would reach a deal to avoid tariffs on $50 billion of U.S. exports, adding that the U.S. and China have been in discussion to find a mutual solution regarding the trade deficit between the two countries.
It was reported on Monday that White House officials sent a to-do list to China and requested a tariff cut on imported cars and open its financial service market to the U.S..
In response, Chinese Premier Li Keqiang said the two countries should maintain negotiations and reiterated pledges to ease access for American businesses, although it was also reported that China requested the U.S. to compensate for lost trade due to the metal tariffs, and dismissed the U.S. claims that such tariffs were instituted for national security purpose. China also argued they were merely safeguard measures aimed at protecting domestic producers.
Overnight, the Dow surged 2.8%, while the S&P 500 jumped 2.7% and the Nasdaq climbed 3.3%.
Japan’s Nikkei gained 1.6% by 10:45PM ET (02:45GMT), with a weaker yen cited as catalyst for the buying in equities.
In China, the Shanghai Composite and the SZSE Component traded 0.9% and 1.5% higher respectively. Reports that HNA abandoned Gategroup’s IPO at last minute received some focus as the company cited weak investors demand. China Southern Airlines Co (SS:600029) posted a record full year net earnings as profit jumped on the back of a stronger yuan.
Hong Kong’s Hang Seng Index also climbed 0.9%. Developers outperformed as Evergrande Real Estate Group Ltd (HK:3333) and China Vanke Co Ltd (HK:2202) earnings came in higher than expected, while Country Garden Holdings Company Ltd (HK:2007)’s ratings raised to outperform at Macquarie.
Elsewhere, reports that North Korea leader Kim Jong Un is set to make a surprise visit to Beijing took center stage, although further details of his trip, including how long Kim would stay and who he would meet were not disclosed at the moment.