Markets Roared On Resumed China-US Trade Talks In October
The world's two largest economies have sent the markets on the frenzy Thursday as reports are out of high-level trade talks happening in October in Washington.
Could this finally be the resolution the markets have been waiting for since the dispute between the two powerhouses erupted in 2018?
The news about the scheduled talks pushed stocks on the uptrend. The U.S. stocks, as well as Asian, and European roared to an average of a month high following official confirmation from both parties.
The Dow Jones Industrial Average was up 436 points or 1.7% while the S&P 500 jumped 1.4% to about 2,980. Financial stocks were high-flying at 2.5% gains, trading 1.6% higher from its record high. The Nasdaq Composite climbed 1.7%
In Europe, shares were up two days in a row. The pan-European STOXX 600 index peaking at its highest level since August 1.
In Australia, the main index closed 60.2 points, 9% higher at 6613.2. Resource stocks led the gains, with commodity prices rising to an impressive level. Leading the sector is Fortescue Metals Group, up 3.4%, and Worley parson up 4.1%. Tech stocks jumped as well, with gains led by Nearmap, Xero, and Bravura Solutions.
In Asia, Nikkei went beyond 21,000, the highest it got in a month. The Topix index on the Tokyo Stock Exchange's first section climbed 27.65 points, coming from 3.98 points the previous day.
The October talks were agreed upon by both parties through a phone call between Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer, according to an official statement from China's commerce ministry. Also joining the call was U.S. Treasury Secretary Steven Mnuchin and China's central bank governor Yi Gang, the statement said.
The reports were also confirmed by a spokesman for the U.S. Trade representative office. The spokesman said the ministerial-level trade talks will happen in Washington.
The renewed talks came at a time when there was little to no progress made between negotiators since their last meeting in Shanghai in July. US President Donald Trump had in fact imposed 15% tariffs on Chinese goods worth $300 billion that month. In retaliation,
China imposed 5% to 10% on about $75 billion worth of US goods.
The two have several more tariffs left to be imposed. Trump said he will increase tariffs from 25% to 30% on an additional $250 billion worth of Chinese goods in October. China, on the other hand, said it would resume tariffs placed on US imports of automobiles and parts in December.