Asian markets resume rally on earnings hopes, trade optimism

Hong Kong, China | AFP | Monday 4/15/2019 – Asian markets chalked up healthy gains Monday as investors cheered a strong start to the US earnings season while Donald Trump’s treasury chief indicated trade talks with China were in their end stage.

The gains put a regional equities rally back on track after last week’s stutter, supported by data last week showing a sharp jump in credit growth in China as easing measures kick in while exports beat expectations and inflation perked up.

New York’s three main indexes provided a positive lead after Wall Street titan JP Morgan recorded a pick up in profits, suggesting the economy remains in rude health and fuelling optimism for upcoming corporate reports.

“The environment of easier financial conditions is beginning to have an impact on the broader economy,” Binay Chandgothia at Principal Global Investors told Bloomberg TV.

“If that is the case and growth does pick up, you’ll see an uptick in analyst expectations and earnings as well, which should help continue the rally.”

In early trade, Hong Kong was up 1.1 percent while Shanghai jumped 1.8 percent, with investors looking ahead to the release of Chinese growth figures Wednesday.

Tokyo went into the break 1.5 percent higher and Singapore gained 0.2 percent while Wellington added 0.4 percent, and Seoul and Taipei both jumped 0.7 percent.

Manila and Jakarta were also up, though Sydney edged down slightly.

Investors were back in a buying mood after last week’s gyrations that came on the back of concerns about a possible new trade war between the US and the EU as Trump threatened to hit the bloc with tariffs over subsidies to aviation giant Airbus.

Buying was also being supported by comments from Treasury Secretary Steven Mnuchin, who said at the weekend that he was “hopeful we’re getting close to the final round of concluding issues” on the China trade talks.

The remarks were picked up as another positive sign that the trade war between the world’s top two economies, which helped hammer global markets last year, could be nearing an end.

The IMF said the world economy should start to bounce back towards the end of the year as long as China and the US resolve their differences.

US officials are also kicking off two days of trade talks with Japan later in the day in Washington with both sides previously saying they wanted to reach an agreement quickly.