The United States and China have reached a 90-day cease the trade war at the meeting of Donald Trump and Xi Jinping at the sidelines of the G-20 summit in Buenos Aires. The US President has agreed not to raise the tariffs of Chinese imports from 10% to 25% as he threatened. China has agreed to buy a still uncontroversial, but a significant amount of agricultural, industrial, energy and other US goods to curb the huge trade imbalance between the two countries. China will immediately begin buying agricultural products from American farmers.
In addition, Beijing has pledged to step up measures against Fentanyl trafficking in the United States against a background of a fatal blast associated with the use of this synthetic drug. Since the beginning of the year, nearly 27,000 Americans have died as a result of using Fentanyl or similar drugs.
The trade agreement calmed down the investors and gave additional impetus to the markets, which moved up. Asian stock reported significant increases on Monday trading session, while European stock started the week with sharp hikes. The Wall Street futures are also on a green territory, signaling for the positive start of December.
Asian market recap
Asian stock exchanges started the week with growth after the US President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to a temporary cease the trade war.
The Chinese continental markets, which are closely monitored for the ongoing trade dispute between Beijing and Washington, have seen significant growths during the day. The index Shanghai Composite rose by 2.57% to about 2,654.80 points, and the smaller Shenzhen Composite advanced by 3.275% to 1,381.55 points.
The movements are also taking place against a backdrop of a new reading of China’s economic activity data with Caixin’s PMI index showing that production slightly expanded in November. The November index has reached 50.2 points compared to 50.1 points in October, which is above the economists’ forecasts.
At the same time in Hong Kong, Hang Seng also jumped by 2.5% in the last trading hours.
Japanese index Nikkei 225 recorded a growth to 22,574.76 points, while Topix advanced by 2.3% to 1,689.05 points.
In South Korea, the main benchmark Kospi finished with an increase of 1.67% to 2,131.93 points.
In Australia, S&P ASX 200 jumped by 1.84% to 5,771.20 points, and almost all sectors ended in positive territory. The shares of large mining companies performed well. The stocks of Rio Tinto rose by 2.33%, Fortescue Metals Group appreciated by 4.25% and BHP Billiton expanded by 3.68%.
European markets mid-session recap
German stocks rallied on Monday, with financials and automakers leading the surge after US President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce on their escalating trade war. The benchmark DAX 30 is up by 278.91 points, or 2.48%, at 11,536.15 at 11:00 GMT. The automakers BMW, Daimler, and Volkswagen soared 5-7 percent after China agreed to slash auto import tariffs. Banks also strengthened, with Commerzbank climbing 2.5% and Deutsche Bank adding 3.2%.
French stocks were sharply higher on Monday after the US and Chinese presidents agreed to a temporary truce in the clash between the world’s two largest economies, helping ease concerns over global growth. The benchmark CAC 40 rose by 1.69% to 5,088.48 points at 11:00 GMT. The banks BNP Paribas, Credit Agricole, and Societe Generale rose around 2%. Automaker Renault advanced by 1.7% and Peugeot gained 2.5% after China agreed to slash auto import tariffs. The stocks of the energy giant Total SA jumped by 2.5% as oil prices surged over 4% due to US-China trade agreement.
The UK stocks followed regional peers higher on Monday, with commodity-related stocks leading the surge. The index FTSE 100 jumped by 148.83 points, or 2.13%, to 7,129.07 points. The stocks of the miners Anglo American, Antofagasta and Glencore soared 6-9% while oil giant BP Plc advanced by 2.6% and Tullow Oil added 5.4%. Standard Chartered jumped 4.2% on a Bloomberg report that the bank is cutting jobs in Dubai and key markets including Singapore as it looks to curb expenses.
Wall Street pre-session recap
Wall Street indexes face a strong rally on Monday with Dow Jones futures rising by 487.00 points, pointing to increase of the blue-chip index by 470.54 points at opening. The futures of S&P 500 and Nasdaq Composite are also on the rise with expected growth of 44.43 points and 162.99 points, respectively.
The futures on oil and copper jumped on hopes a possible new China-U.S. trade agreement would boost global economic growth.
On the data front, investors are likely to watch out for a final reading of manufacturing PMI data for November at around 9:45 a.m. Construction spending figures for October and light vehicle sales data for November are expected to follow at 10 a.m.
On the earnings front, Coupa Software, Mesa Air and Smartsheet are all expected to publish their latest quarterly earnings results shortly after the closing bell.