Asia-Pacific shares rose Thursday as investors welcomed signals the U.S. and China are open to negotiations rather than escalating threatened tit-for-tat trade tariffs.
Stocks in Singapore led broad gains across the region, rising 1.7%, with shares in Japan and South Korea up 1%. Markets in mainland China, Hong Kong and Taiwan were closed for holidays.
Market sentiment staged a U-turn overnight, with major U.S. stock indexes swinging to strong gains by the close as fears over China’s plans to impose trade countermeasures against the U.S. gave way to optimism the countries will ultimately reach a compromise. The Dow Jones Industrial Average closed up 1% after a drop of as much as 510 points earlier in the session.
That spurred a strengthening of the dollar, while bonds and gold slid as worries about the risk of a damaging trade war receded.
“China’s retaliation to the second round of U.S. tariff barriers unnerved European traders. However, focus shifted to deferred starts to announced sanctions and the potential for a negotiated solution despite tough talk from both sides,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said.