Emerging stocks soared on US-China trade talk

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Emerging stocks soared on US-China trade talk optimism, Asian stocks upbeat

Asian stocks, US-China trade deal and emerging market trending points

  • The risk appetite seemed to be waning for global equities, as US-China trade talk concluded with hopes of a faster ratification.
  • Rand firms alongside, Asian stocks were up on Wednesday, the 9thof January, 2019, on the US-China trade talk optimism
  • Countries heavily exposed to global trade such as South Korea, Taiwan, China closed the day higher, despite poor manufacturing data.

Emerging markets raising alongside, European stocks on US-China trade talk optimism

On Wednesday, the 9thof January, 2019, the stocks and currencies of emerging markets soared, as trade talk optimism boosted the sentiments and the risk appetite appeared to be lowering, despite ongoing threats of economic squeezing. Rand firms alongside, Asian stocks were up on Wednesday, the 9th of January, 2019, on the US-China trade talk optimism

Today’s market had experienced a tremendous turnover from all over the world, including currencies, commodities and equity indexes, while the American dollar drifted below critical support levels.

MSCI’s index of emerging market stocks, that keeps track of 47 country’s shares, hit a one-month high, and the index was 1.3 percent up during the preparation of this report, Jan 9th, GMT. 15.30. Concomitantly, the index of emerging market currencies had gained 0.2 percent, while the American dollar fell against almost all of the major currencies.

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MSCI all-country equity index chart (weekly) (Jan. 2010-Jan. 2019)

MSCI all country equity index chart

Several analysts had been quoted saying that if the world’s largest two economies could rubberstamp a decipherable deal earlier than expected, 2018’s loss could be recovered by mid-2020. In fact, the US President Donald Trump’s trade war, had casted away trillions from the global market last year, which had also been the worst year for world stocks, since the year of great financial depression.

Stocks exposed to global trade from all over the world rose on Wednesday, including China, South Korea and Taiwan, posting gains between 0.7 to 2 percent. The Chinese yuan rose 0.4 percent in the offshore trading, which has been its highest level since December 4th, 2018. The South African Rand posted 0.2 percent gain, while the domestic stocks were 1.1 percent higher, led by a surge in the stock price of an Internet group called Naspers Ltd, which scored 2.6 percent gain.

The Russian stocks hit their monthly highs, and posted a 0.6 percent gain, while the Turkish Lira softened slightly by 0.3 percent on US-Turk Geo-political tension over Syria attack issue.

Bottom Line

Given yesterday’s upbeat equities on Wall street over Trump’s cheerleading tweet on US-China trade talks, it is as clear as bright daylight that the mood music of US-China trade war has been soothing.

As, the latest round of US-China trade talk on Beijing has been considered as a galvanizer for the upbeat momentum of a gnarly global economy, the emerging stocks’ outlook appear to be brighter, alongside, Wall St., while the commodity market might also experience a sudden surge, as copper touched a weekly high today, on trade talk optimism.

Read more on US-China trade talk here

[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]

 

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