Asia report: Markets rise as Trump suspends China trade deadline

Markets in Asia finished higher across the board on Monday, with sentiment getting a good kick into action thanks to the White House confirming it was postponing its self-imposed 1 March deadline to come to a trade agreement with Beijing.

In Japan, the Nikkei 225 was up 0.48% at 21,528.23, as the yen weakened 0.05% against the dollar to last trade at JPY 110.75.

The broader Topix index was 0.71% higher in Tokyo at 1,620.87.

Shares in fast fashion giant Fast Retailing, which owns the global chain Uniqlo, posted gains of 0.67%.

On the mainland, the Shanghai Composite surged 5.6% to 2,961.28, and the smaller, technology-heavy Shenzhen Composite rocketed 5.42% to 1,557.27.

The jet-powered boost for the Shanghai bourse took the benchmark into a bull market, meaning it has risen more than 20% from the intraday lows in early January.

It had fallen into bear market territory, meaning it was down more than 20% from a recent peak, last June.

South Korea’s Kospi managed gains of 0.09% to finish the day at 2,232.56, while the Hang Seng Index in Hong Kong added 0.5% to end at 28,959.30.

Shares of China Construction Bank listed in the special administrative region were ahead 2.88%, and cellular technology manufacturer ZTE was 1.71% firmer in Hong Kong.

The latter has been under scrutiny in recent years, after it all but folded following a US Commerce Department ruling banning US firms from supplying it with technology, which came on the back of alleged violations of US sanctions against Iran and North Korea by ZTE.

After instruction from Donald Trump, the Commerce Department lifted that ban and cut a new deal with ZTE last June, with the hope now that a trade deal between Washington and Beijing will help the company further recover.

It was those hopes that saw sentiment launch towards the stratosphere in the region on Monday, after US president Donald Trump used his favourite medium to let markets know he was planning to delay the 1 March deadline.

In a series of tweets, Trump said there had been “substantial progress” in trade negotiations between the two largest economies, indicating that the US was getting its way when it came to technology transfer and intellectual property rules - long seen as sticking points for the Americans when it comes to trade with China.

Previously, if a deal was not struck with China by 1 March, the US had lined up a new round of punitive tariffs to slap on Chinese imports from that date.

Trump confirmed he was suspending those tariffs, although he did not indicate whether a new deadline was being implemented.

“As both presidents said significant progress has been made, the chance for the US and China to reach a deal is getting higher,” noted analysts at OCBC Treasury Research.

“However, the key to medium term stability hinges on two areas including agreement on China’s structural reforms and the enforcement of trade deals.”

In Australia, the S&P/ASX 200 rose 0.31% to 6,186.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 0.4% at 9,344.63.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.61% at AUD 1.3942, and the Kiwi advancing 0.69% to NZD 1.4507.