Global markets advanced Thursday on hopes for a trade truce between the United States and China and the Federal Reserve’s hint at lower rates.
Confirmation of a meeting between President Donald Trump and his counterpart Xi Jinping at the Group of 20 summit in Osaka, Japan next week has raised hopes for a political compromise on their tariffs war.
U.S. Trade Representative Robert Lighthizer told a congressional hearing that he plans to speak with China’s top trade envoy, Vice Premier Liu He, soon and also to meet with him in Osaka.
China’s Commerce Ministry confirmed Thursday that the trade negotiators were holding talks in preparation for the meeting. Prospects for a breakthrough in the stalled negotiations remain uncertain, however, given the acrimony in recent weeks over who is to blame over the impasse.
“The only uncertainty out there relative to six or seven months ago is the U.S.-China trade situation, and for now things are looking up,” said Michael Every of Rabobank.
The S&P 500 future picked up nearly 0.9 percent to 2,959. In Asia, Tokyo’s Nikkei 225 index added 0.6 percent to 21,462.86 while the Hang Seng in Hong Kong surged 1.2 percent to 28,550.23. Shanghai was up 2.4 percent to 2,987.12 while Australia’s S&P ASX 200 picked up 0.6 percent to 6,687.40. India’s Sensex advanced 0.8 percent to 39,431.89.
The expected decision Wednesday by the U.S. central bank’s policymakers to leave the Fed’s benchmark interest rate unchanged in a range of 2.25 percent-2.5 percent and the signal of openness to lower rates later also reassured investors who have been worried the trade war could weigh on growth and corporate profits.
“For now, equities seem to be running with the notion that this is all a good news story,” Robert Carnell of ING said in a commentary.
By Elaine Kurtenbach and Matt Ott for The Associated Press.