December 31, 2018: Hong Kong headed for a positive end to a tough year Monday, with the Hang Seng rising after US President Donald Trump hailed “big progress” on resolving Washington's trade war with Beijing.
In light holiday trading with Tokyo and Shanghai closed, stocks in the south China financial hub were buoyed by Trump's upbeat assessment on prospects for ending the tariff conflict between the world's two biggest economies, which has rattled markets globally.
“Just had a long and very good call with President Xi of China,” Trump said on Twitter.
“Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!”
Washington and Beijing imposed tit-for-tat tariffs on more than $300 billion worth of goods in total two-way trade earlier this year, locking them in a conflict that has begun to eat into profits and contributed to stock market plunges.
While investors remain concerned, relations have thawed since Chinese President Xi Jinping and Trump agreed to a 90-day trade truce in early December while the two sides work to ease trade tensions by March 1.
Chinese state news agency Xinhua quoted Xi as telling Trump the leaders of both the United States and China want “stable progress” in ties.
“China attaches great importance to the development of bilateral relations,” Xi added.
Analysts welcomed the apparent progress, following a torrid time for equities which have also been unnerved by fears over slowing global growth, a partial US government shutdown, US Federal Reserve interest rates hikes and Trump's attacks on the central bank.
“It's a positive development,” Tony Morriss, Bank of America Merrill Lynch head of economics and rates strategy, said in a Bloomberg TV interview.
“What we'd like to see now is the market pricing out any further action from the Fed, the stock markets stabilizing and focusing on some positive headlines on trade.”