Stocks gain after US-China deal exceeds expectations | REUTERS
Japanese stocks led gains in Asia on Tuesday after a US deal with China to slash tariffs exceeded investor expectations. Tokyo’s nickel index jumped around 1.5% in early trade. There was a similar rise for equities in Taiwan and more modest gains for Shanghai and Seoul. In Hong Kong, stocks fell 1%. However, markets there had still been trading when news of the agreement broke on Monday with stocks in the city enjoying their postdeal jump a day earlier than the rest of Asia. The outcome agreed after weekend talks in Geneva surpassed most market expectations. It will see a 90-day pause in tip fortat tariffs and drastic cuts in the recently imposed levies. One analyst called it a nice big surprise for both sides of the Pacific. The news sapped support for traditional safe havens with gold down over 3% on Monday and then edging lower again on Tuesday morning. However, tariffs remain significantly higher than they were before Donald Trump sparked the trade war and there is still huge uncertainty about what happens next. Peterson Institute for Economics Executive Vice President Marcus Noland is betting the 90-day pause will become permanent, but he says that won’t end all problems. We won’t be completely out of the woods. Uh President Trump is talking about putting tariffs on other products, namely pharmaceuticals, uh which we get a lot from China and India. So that could if he moved forward with that action that could once again raise tariffs and also could once again scramble relations with China. Economists remain concerned about what higher tariffs will mean for global growth and that’s far from the only worry. Investors are also watching what Trump’s planned tax cuts will mean for US public debt levels. One said the trade deal doesn’t mean uncertainty has gone away. It’s just moved to a new area.
Japan led gains for Asian stocks, reacting to a US-China deal to delay and slash tariffs and de-escalate trade tensions between the world’s two biggest economies.
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