Asia Markets gain after Trump-Xi trade breakthrough

October 31, 2025 (MLN):  Asia markets opened mostly higher on Friday as investors welcomed signs of easing trade tensions between Washington and Beijing following a high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping.

The two leaders reached a limited trade truce during their meeting in South Korea on Thursday, easing a dispute over rare earth exports that had threatened to escalate into a full-blown trade war between the world’s two largest economies.

“Both sides appear to be maintaining leverage for future negotiations by keeping these measures as bargaining chips,” said Chaoping Zhu, global market strategist at JPMorgan Asset Management.

In Japan, the Nikkei 225 surged over 1%, hitting a fresh all-time high, while the Topix index advanced 0.79%, also setting a new record. South Korea’s Kospi climbed 0.22%, following Thursday’s record close, and the Kosdaq rose 0.47%. Australia’s S&P/ASX 200 was also up 0.45% in early trade.

However, Chinese markets lagged behind. Hong Kong’s Hang Seng Index slipped 0.33%, while the mainland’s CSI 300 hovered around the flatline as weak economic data weighed on sentiment.

China’s official manufacturing purchasing managers’ index (PMI) dropped to 49 in October, the lowest since May, according to the National Bureau of Statistics. The figure fell short of economists’ expectations of 49.6 in a Reuters poll, signaling a deeper contraction in factory activity. The index has remained below the 50-point growth threshold since April, pressured by renewed trade friction and subdued global demand.

Among individual movers, Panasonic Holdings shares plunged more than 8% after the company cut its full-year operating profit forecast by 13.5%, citing weaker earnings from its energy unit, which supplies batteries to Tesla and other automakers.

Overnight in the U.S., Wall Street closed lower as investors digested a mixed round of Big Tech earnings. The S&P 500 fell 0.99% to 6,822.34, the Nasdaq Composite dropped 1.57% to 23,581.14, and the Dow Jones Industrial Average slipped 0.23% (down 109.88 points) to 47,522.12.

The partial U.S.-China trade détente has provided temporary relief to global markets, though analysts caution that fundamental issues between the two powers remain unresolved.

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