Asian markets pare gains on US and China truce doubts
On Tuesday the Hang Seng was 0.3% lower and Japan’s Nikkei fell back 1.3%.
Shares were up sharply in Europe and the US following a truce between the US and China agreed at the G20 Summit in Buenos Aires, but also slipped back on a lack of certainty over details of the agreement.
US President Donald Trump and his Chinese counterpart Xi Jinping have suspended new trade tariffs for 90 days and undertake further talks.
Mr Trump will halt plans to boost tariffs on $200bn (£157bn) of Chinese goods from 10% to 25% on 1 January while China has agreed to buy more agricultural, industrial and energy products.
The two leaders will begin talks in other areas such as intellectual property protection, cyber intrusions and cyber theft, and services, the White House said.
President Trump emerged from the talks with an upbeat assessment on what appeared to be a thawing in the previously frosty relationship, and said both China and the US would see some gains from the agreement.
The Chinese government’s top diplomat, State Councillor Wang Yi said: “China is willing to increase imports in accordance with the needs of its domestic market and the people’s needs, including marketable products from the United States, to gradually ease the imbalance in two-way trade.”
The FTSE 100 was trading 2.3% higher at 7140 in early trade but closed 82 points or 1.18% higher at 7062.41.
The Dow was 1.13%% ahead, Nasdaq was up 1.51% while the S&P 500 traded 1.09% higher.
Masamichi Adachi, senior economist at JP Morgan in Japan, said: “I do not think market consensus is looking for very significant progress, this is a temporary truce.
“Many people suspected that there may be a more disastrous outcome, this is definitely a relief.”
Analysts at Danske Bank said: “Trump’s need for a deal with China and a strong US economy when he goes into the 2020 election campaign increases the chance of an end to the trade war in 2019.
“While we should expect bumps in the road, we continue to look for a deal next year and odds are rising it could come as early as the end of Q1.”