The major Asia Pacific stock indexes continued their recovery from recent coronavirus losses on Thursday on the back of positive developments on the U.S.-China trade front.
European shares are also surging, dominated by earnings and as fears over the coronavirus outbreak start to fade.
The primarily catalyst supporting the strength is the news that China will halve tariffs on hundreds of U.S. goods worth about $75 billion. Tariffs on some U.S. goods will be cut from 10% to 5%, and from 5% to 2.5% on others.
On Thursday, Japan’s Nikkei 225 Index settled at 23873.59, up 554.03 or +2.38%. Hong Kong’s Hang Seng Index finished at 27493.70, up 706.96 or +2.64% and South Korea’s KOSPI closed at 2227.94, up 62.31 or +2.88%.
In China, the Shanghai Index settled at 2866.51, up 48.42 or +1.72% and Australia’s S&P/ASX 200 Index finished at 7049.20, up 73.10 or +1.05%.
China to Halve Retaliatory Tariffs
Retaliatory duties on some U.S. goods will be cut from 10% to 5%, and from 5% to 2.5% on others, according to a statement from China’s Ministry of Finance. The adjustments will take effect from 1:01 p.m. on February 14, it said, without specifying which time zone it was referring to.
The statement said the move was made in order to “advance the healthy and stable development of China-U.S. trade.”
China said that the next adjustment will depend on how Sino-U.S. trade times evolve, adding it hopes to work with Washington to completely eliminate all tariff increases.
Coronavirus Updates
The markets are being supported by unconfirmed reports of breakthroughs in the development of a drug for the disease and liquidity.
UOB Private Bank’s Francis Tan told CNBC on Thursday that two factors are driving market movements. Firstly, the investment strategist said, the market is anticipating that a “vaccine should be coming soon.”
The second factor, which I think is a lot more important especially since the global financial crisis after (2008 and 2009), is that there’s ample liquidity in the market,” Tan told CNBC’s “Street Signs” on Thursday.
Australia December Retails Sales Down Sharply
Australian retailers suffered their worst month in nearly 2-1/2 years in December as shoppers were discouraged by bushfires that blazed along the south-eastern coast of the country and stoked smoke haze over the biggest cities of Sydney and Melbourne.
Retail Sales dropped 0.5% in December, the worst monthly performance since August 2017. Traders were looking for a 0.2% decline.
This article was originally posted on FX Empire
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