World shares and US futures surged yesterday after the US and China announced they were suspending for 90 days most of the sharp tariff hikes each has imposed since US President Donald Trump began escalating his trade war.
For a 90-day period, the US is to cut tariffs on Chinese goods to 30 percent from as high as 145 percent, while China’s tariffs on US goods would fall to 10 percent from 125 percent, a joint statement said.
The agreement to allow time for more talks followed weekend negotiations in Geneva, Switzerland, that the US side said had made “substantial progress.”
Photo: AFP
The full impact on the tariffs and other trade penalties enacted by Washington and Beijing remains unclear, and much depends on whether they find ways to bridge differences during the suspension.
However, as trade envoys from the world’s two biggest economies blinked, finding ways to pull back from potentially massive disruptions to world trade and their own markets, investors rejoiced.
The TAIEX ended up 214.50 points, or 1.03 percent, at 21,129.54, on the back of improved market sentiment toward the US-China trade talks. Buying also focused on the bellwether electronics sector, with investors anticipating positive leads from the Computex trade show in Taipei, which is to run from Tuesday next week to Friday.
“Computex is coming,” Hua Nan Securities Investment Management Co (華南投顧) analyst Kevin Su (蘇俊宏) said. “Investors hope [artificial intelligence] chip designer Nvidia Corp CEO Jensen Huang (黃仁勳) will give positive leads in his speech at the event.”
Regional equities also climbed, with Hong Kong jumping 3 percent, while Shanghai — which closed before the tariff cuts were announced — was up 0.8 percent.
Tokyo, Sydney, Seoul and Wellington were all in the green. Paris and Frankfurt rose more than one percent, while London was also higher in early European trading.
Oil prices rallied, with US benchmark crude oil gaining US$1.66 to US$62.68 per barrel. Brent crude, the international standard, added US$1.63 to US$65.55 per barrel.
The US dollar surged against the yen, trading at 148.18 yen, up from 146.17. The euro fell to US$1.1107 from US$1.1209.
“The initial reaction to the weekend US-China talks [is] predictably encouraging,” Pepperstone Group research head Chris Weston said.
However, Bank J Safra Sarasin chief economist Karsten Junius was cautious.
“We expect financial markets to remain volatile over the coming months, as they have almost fully priced out negative economic surprises and could once again be disrupted by more serious obstacles in trade negotiations,” he said in a commentary. “In all likelihood, things may still get worse before they get better.”
Investors were also watching for developments in other flashpoints, including clashes between India and Pakistan.
The Sensex in Mumbai shot up 3.2 percent after India and Pakistan agreed to a truce after talks to defuse their most serious military confrontation in decades. Pakistan’s KSE 100 surged more than 9 percent.
Additional reporting by CNA and AFP
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
RSS