Asia markets extend rally as eyes turn to Fed meeting

HONG KONG: Asian markets rose yesterday as investors tracked a positive lead from Wall Street on optimism over the China-US trade talks, while attention turns to the Federal Reserve’s next policy meeting this week.

The pound held gains as Prime Minister Theresa May tries to push her EU divorce deal through parliament for a third time, failure of which could see Britain extend its exit deadline or possibly crash out of the bloc.

The broad-based gains built on last week’s advance as top officials from the world’s biggest economies work on an agreement to end their long-running tariffs spat, which was a major drag on markets at the end of 2018.

While there are few details on the talks as they stand – and a floated summit between Donald Trump and Xi Jinping looks to be later than expected – upbeat comments from both sides are keeping investors broadly happy for now.

“The signing of a trade deal between the US and China would eliminate one major headwind for global markets and is currently the more probable outcome according to most analysts,” said James Hughes, chief market

The signing of a trade deal between the US and China would eliminate one major headwind for global markets and is currently the more probable outcome according to most analysts. James Hughes, AxiTrader chief market analyst

analyst at AxiTrader.

“There is more of an incentive for both superpowers to make a deal because it is economically in their best interests. This is especially the case given the growing US trade deficit due to falling exports to China.”

In early trade Hong Kong gained 0.6 per cent and Shanghai was up 1.2 per cent, while Tokyo went into the break 0.6 per cent higher. Sydney edged up 0.2 per cent and Singapore was 0.3 per cent up while Seoul, Wellington, Taipei and Jakarta were also stronger.

The Fed’s next meeting will be closely followed in hopes it will give an idea about its plans for interest rates, with some observers suggesting it will pare its pace of hikes in the face of a slowing global economy.

– Reuters photo Container cranes are pictured at the Port of Singapore. The broad-based gains built on last week’s advance as top officials from the world’s biggest economies work on an agreement to end their long-running tariffs spat, which was a major drag on markets at the end of 2018.