Asian markets rally on US-China trade tariff ceasefire

Markets in Asia rallied on Monday morning following the agreement from the United States (US) and China to hold off further tariffs and to resume trade talks at the Group of 20 summit over the weekend.

Shares in China rallied on Monday as investors cheered on the ceasefire between China president Xi Jinping and US president Donald Trump and their interest to resume with the trade talks.

The benchmark Shanghai Composite Index jumped 1.54%, or 45.74 points, at 3,024.62, while the smaller Shenzhen Composite Index climbed 2.08%, or 32.43 points, to 1,594.85.

Tokyo stocks opened higher with the benchmark Nikkei 225 index up by 1.63%, or 347.50 points, at 21,623.42 while the broader Topix index rose by 1.60%, or 24.79 points, to 1,575.93.

Malaysia and Singapore shares also rose at the open. The FTSE Bursa Malaysia Kuala Lumpur Composite Index was higher by 3.21 points, at 1,675.34 while the Singapore Straits Times Index gained 0.6%, or 20.6 points, at 3,342.22, minutes into trading.

US-China resume trade talks

China’s president Xi and US president Trump agreed on Saturday to resume trade talks, avoiding the escalation of their multi-billion tariff war, a long drawn dispute which has roiled global markets and has placed both of the world’s two largest economies at risk.

The agreement to restart talks come after a seven-week stalemate. On Saturday, both leaders came to an agreement to continue with the trade talks after more than an hour of discussion.

‘We discussed a lot of things, and we’re right back on track,’ Mr Trump told reporters after his session with Mr Xi on the side lines of the annual summit meeting of the G20 in Osaka, Japan, reported The New York Times.

‘We had a very, very good meeting with China,’ the president added, ‘I would say probably even better than expected, and the negotiations are continuing.’

Additional tariffs to be put on hold: Trump

Mr Trump said he will put on hold his earlier threat to slap on 25% of tariffs on US$300 billion in Chinese imports. The president also agreed to lift some restrictions on Chinese technology firm Huawei, the firm that has been caught in the rift-raff between the two nations.

Mr Trump also claimed that China, in exchange, has agreed to buy a ‘tremendous amount’ of American food and agricultural products.

Washington has already imposed 25% of tariffs on US$250 billion of Chinese goods and China has retaliated with tariff hikes on US$60 billion of US goods.