May 7, 2019: Asian markets mostly rose Tuesday, paring some of the previous day's painful losses as investors welcomed news that Chinese trade negotiators will travel to Washington this week despite Donald Trump's threat to hike tariffs.
Equities across the region were hammered Monday — led by Shanghai's worst losses in three years — after the president's warning fueled by frustration at slow progress in the talks.
However, after hefty losses at the open, European and US markets slowly recovered to end slightly lower as dealers focused on Beijing's decision not to cancel their next meeting, as some reports had suggested earlier in the day.
Trump's remarks came as a shock, coming just days after officials on both sides had sounded positive on the talks, with markets broadly expecting an agreement to be announced soon.
While some observers pointed out that such high-stakes moves are characteristic of Trump's negotiating style and that they expect a deal to be agreed anyway, OANDA senior market analyst Jeffrey Halley remained cautious.
“Say what you want about the US president… but predictability and subtlety were never part of his election pledges,” he said in a note. “China has most certainly found this out the hard way and likely explains why they are still sending their full delegation to this week's round of trade talks.
“I take much greater comfort in China's pragmatism than the president's Twitter account, but the markets should take a leaf from China's playbook and not assume the president was merely bluffing.”
Still the sense of relief in the US filtered through to Asia, where Shanghai rose 0.9 percent after diving more than five percent on Monday.
Hong Kong also added 0.8 percent following a nearly three-percent plunge, while Sydney was up a similar amount.
(APP)
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