Asian shares see-sawed in a wild ride on Tuesday following confusing statements from the White House over the U.S.-China trade deal, with President Donald Trump later clarifying the pact was “fully intact.”
FILE PHOTO: A man wearing a protective face mask, following the coronavirus disease (COVID-19) outbreak, walks in front of a stock quotation board outside a brokerage in Tokyo, Japan, May 18, 2020. REUTERS/Kim Kyung-HoonTrump’s tweet bolstered market sentiment, helping e-minis for the S&P 500 swing back to positive territory. Asian shares were quick to turn around too, with MSCI’s broadest index of Asia Pacific shares outside of Japan up 0.7%.
Risk sentiment had taken a knock early in the Asian day after White House trade adviser Peter Navarro said the trade deal with China was “over”, linking the breakdown in part to Washington’s anger over Beijing not sounding the alarm earlier about the coronavirus outbreak.
The comment caused a kneejerk selloff in equities markets, although sentiment turned around quickly after a statement from Navarro that his comment had been taken out of context.
“With the White House, you can never be sure whether they are voicing their own position or the official position,” said Moh Siong Sim, Singapore based forex analyst at the Bank Of Singapore.
“If he’s speaking about his own position, it’s pretty much consistent with Navarro. We know he is a hardliner ... (but) ultimately it’s Trump who decides whether the trade deal is on or off.”
Trump soothed nerves when he tweeted: “China trade deal is fully intact. Hopefully they will continue to live up to the terms of the agreement.”
In response, China’s blue-chip index regained its losses to be last up 0.3% while Hong Kong’s Hang Seng climbed 0.7%.
Australia’s S&P/ASX 200 rose 0.1% while Japan’s Nikkei added 0.8%.
Asian stocks have rallied hard since hitting a low in March amid worries about the jolt to the global economy from the coronavirus-driven shutdowns.
The gains have been driven by hefty central bank stimulus around the globe and gradual easing of restrictions, although worries about a second wave kept investors jittery.
Beijing on Monday reported its second straight day of record COVID-19 infections, while new cases and hospitalisations in record numbers swept through more U.S. states.
New infections spiked in Latin America, Brazil in particular, while New York City, the epicenter of the U.S. outbreak, eased restrictions after 100 days of lockdown.
On Wall Street overnight, the Dow rose 0.59%, the S&P 500 gained 0.65% and the tech-heavy Nasdaq added 1.11% to set a record closing high.
In currencies, the safe haven yen slipped against the dollar to 107.17, while the euro was a shade higher at $1.1265.
The risk sensitive Australian dollar was up 0.3% at $0.6925. Its kiwi counterpart was flat at $0.6478 having pared its losses.
In commodities, U.S. crude fell 0.3%, or 12 cents, to $40.61 a barrel, while Brent was flat at $43.08.
As investors piled on equities, spot gold was off 0.2% at $1,750.5 an ounce.