HONG KONG (AFP) – Asian stocks surged Wednesday as US President Donald Trump said he may extend his trade deal deadline with China, and a report claimed his counterpart Xi Jinping would meet top US officials in Beijing, seeming to boost the prospects of an agreement.
High-level talks are due to begin in the Chinese capital Thursday aimed at an accord to stop sharp US tariff hikes that could damage the global economy.
Trump said he could let his March 1 deadline “slide for a little while” if the two sides were close to a meaningful deal, adding that he expects a summit with Xi “at some point”.
Later a report in the South China Morning Post said Xi would personally meet the US delegation in Beijing, suggesting a redoubled effort to make progress on a deal.
The developments improved market sentiment on the likelihood of a resolution to prevent US tariffs more than doubling on $200 billion in Chinese imports next month. Washington is demanding changes from Beijing on what it says are unfair commercial practices.
Tokyo added a further 1.3 percent after Tuesday’s gains to finish at a two-month high.
Hong Kong rose 1.1 percent, and Shanghai earned 1.8 percent on the news, following Wall Street’s lead.
However, some analysts struck a cautious tone, noting that much work needs to be completed before a framework agreement is in reach.
“The rally in stocks has been based on hope rather than any concrete agreements overnight,” warned Oanda senior analyst Jeffrey Halley, predicting short-term volatility to come as headlines emerge from Beijing.
Elsewhere Sydney shed 0.3 percent, with calls for a snap election amid political tensions over refugees adding to underwhelming corporate earnings and subdued metal prices.
The New Zealand dollar soared 1.6 percent as the central bank held interest rates unchanged and forecast no moves until 2021 — stumping expectations it may follow dovish leads elsewhere by indicating a rate cut.
Renewed global investor confidence saw a movement away from the greenback — which has enjoyed a strong rally in the past week — to riskier currencies.
The pound moved upwards past $1.29, despite no-deal Brexit fears as Prime Minister Theresa May was accused by the opposition of “running down the clock” and “playing chicken” with Brussels over talks.
The yuan also earned back losses after it had dropped following the Lunar New Year break.
Trump’s suggestion that another chaotic US government shutdown was now unlikely following a deal struck in Congress over border security further fuelled risk appetite.
The deal to offer nearly $1.4 billion for construction of a Mexico border wall, as well as other security measures, fell far short of Trump’s demands but has been presented as a workable compromise.
“I don’t think you’re going to see a shutdown,” said the president.
Oil continued its climb after heavyweight Saudi Arabia slashed output and exports fell in crisis-hit Venezuela.