AFP, Hong Kong :
Asian investors on Monday cheered a partial trade deal between China and the United States, sending regional markets rallying, though observers were sceptical about the overall significance of the agreement. Dealers took their lead from a strong performance on Wall Street after top-level negotiators ended two days of talks saying US tariffs due to take effect this week would be put off and China would ramp up its purchases of US farm products.
They also agreed on other issues including intellectual property, financial services and currencies.
The news provided some much-needed support to Asian markets, with Shanghai and Hong Kong both jumping more than one percent.
Sydney gained 0.7 percent and Singapore put on 0.4 percent, while Wellington, Taipei and Seoul also rallied more than one percent.
Manila and Jakarta saw healthy advances.
However, while the deal was welcomed by Trump as “the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country”, analysts were a little more guarded.
“Let’s not get carried away,” Raoul Leering, head of international trade research at ING Bank NV, told Bloomberg News. “There is a very tough journey ahead for the US and Chinese negotiators to cut a deal that really has substance.”
And Tai Hui, chief market strategist for Asia at JP Morgan Asset Management, warned that “market optimism may not be well supported by economic reality”.
He added: “While we are still waiting on the details on concessions made by both sides, it seems these are still the low-hanging fruits that Beijing has offered in the past.
“Some of the more challenging issues, such as the US blacklisting of Chinese tech companies and possible limits on US institutional investors investing in Chinese equities, don’t seem to be on the agenda.”
On currency markets, the dollar dipped against most higher-yielding, riskier units owing to improved optimism. The pound, however, was suffering selling pressure after European leaders appeared unmoved by a hailed Brexit breakthrough on the Northern Irish question between the leaders of Britain and Ireland.
Sterling rallied last week after British Prime Minister Boris Johnson and counterpart Leo Varadkar said after talks they could see a route towards striking a possible divorce deal.
But European officials said Sunday there were still obstacles on how to manage trade and customs between EU member Ireland and Northern Ireland, which is part of Britain.
“Eurozone negotiators and country leaders appear to be underwhelmed by the elaborate detail of the proposed Irish backstop solution,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.
Asian investors on Monday cheered a partial trade deal between China and the United States, sending regional markets rallying, though observers were sceptical about the overall significance of the agreement. Dealers took their lead from a strong performance on Wall Street after top-level negotiators ended two days of talks saying US tariffs due to take effect this week would be put off and China would ramp up its purchases of US farm products.
They also agreed on other issues including intellectual property, financial services and currencies.
The news provided some much-needed support to Asian markets, with Shanghai and Hong Kong both jumping more than one percent.
Sydney gained 0.7 percent and Singapore put on 0.4 percent, while Wellington, Taipei and Seoul also rallied more than one percent.
Manila and Jakarta saw healthy advances.
However, while the deal was welcomed by Trump as “the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country”, analysts were a little more guarded.
“Let’s not get carried away,” Raoul Leering, head of international trade research at ING Bank NV, told Bloomberg News. “There is a very tough journey ahead for the US and Chinese negotiators to cut a deal that really has substance.”
And Tai Hui, chief market strategist for Asia at JP Morgan Asset Management, warned that “market optimism may not be well supported by economic reality”.
He added: “While we are still waiting on the details on concessions made by both sides, it seems these are still the low-hanging fruits that Beijing has offered in the past.
“Some of the more challenging issues, such as the US blacklisting of Chinese tech companies and possible limits on US institutional investors investing in Chinese equities, don’t seem to be on the agenda.”
On currency markets, the dollar dipped against most higher-yielding, riskier units owing to improved optimism. The pound, however, was suffering selling pressure after European leaders appeared unmoved by a hailed Brexit breakthrough on the Northern Irish question between the leaders of Britain and Ireland.
Sterling rallied last week after British Prime Minister Boris Johnson and counterpart Leo Varadkar said after talks they could see a route towards striking a possible divorce deal.
But European officials said Sunday there were still obstacles on how to manage trade and customs between EU member Ireland and Northern Ireland, which is part of Britain.
“Eurozone negotiators and country leaders appear to be underwhelmed by the elaborate detail of the proposed Irish backstop solution,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.
