BANGKOK (AP) — Asian shares surged Monday while European markets were little changed after U.S. President Donald Trump said he expected to reach a trade agreement with China.
Germany's DAX gained 0.2% to 24,279.53 and the CAC 40 in Paris slipped 0.1% to 8,218.42. Britain's FTSE 100 also shed 0.1%, to 9,640.12.
The future for the S&P 500 jumped 0.9% while that for the Dow Jones Industrial Average was up 0.6%.
Work on trade deals that might alleviate friction
between the U.S., China and other major trading partners has reassured investors, especially in Asia.
Japan's benchmark Nikkei 225 gained 2.5% to 50,512.32, a new closing high following news that the world’s two largest economies had reached an initial consensus for Trump and Chinese leader Xi Jinping to finalize during a high-stakes meeting later in the week.
“I have a lot of respect for President Xi,” Trump told reporters after visiting Malaysia for a summit of Southeast Asian nations, where he reached preliminary trade agreements with Malaysia, Thailand, Cambodia and Vietnam.
“I think we’re going to come away with a deal,” Trump said.
Chinese markets logged solid gains. Hong Kong’s Hang Seng rose 1.1% to 26,434.69, while the Shanghai Composite index added 1.2% to 3,996.94.
“This isn’t just photo-op diplomacy. Behind the showmanship, Washington and Beijing’s top trade lieutenants have quietly mapped out a framework that might, just might, keep the world’s two largest economies from tearing up the field again,” Stephen Innes of SPI Asset Management said in a commentary.
Trump traveled to Japan on Monday and will end his Asian tour in South Korea, where he is expected to meet with Xi on the sidelines of a Pacific Rim summit, the Asia-Pacific Economic Cooperation (known as APEC) forum.
Opinion polls show Japan's newly installed Prime Minister Sanae Takaichi enjoys high levels of public support for her market-friendly policies and apparent strong performance in her debut at the regional summit. Japan's first female prime minister, Takaichi favors raising defense spending. That has boosted prices of stocks in major defense contractors, such as Kawasaki Heavy Industries, which gained 9%. IHI Corp. jumped 2.8% and Hitachi gained 3.7%.
Trump has long complained American cars were shut out Japanese markets, one of various reasons he cited for imposing tariffs of 25%, then lowered to 15%, on American's most vital ally in Asia. So as part of its negotiations with Washington, Japan’s government has floated the idea of buying a fleet of Ford F-150 trucks to use to inspect roads and infrastructure.
In South Korea, the Kospi gained 2.6% to 4,042.83, also a record. Investors there are hoping for a trade deal with Trump. Australia's S&P/ASX 200 picked up 0.4% to 9,055.60.
Taiwan's Taiex gained 1.7% and the Sensex in India was up 0.7%.
Despite the positive talk about trade agreements, a report by the APEC secretariat released Monday forecast that annual growth in the region circling the Pacific will slow to 3% this year from 3.6% last year, partly due to trade restrictions and higher tariffs.
On Friday, U.S. stocks hit records after an update on inflation came in a bit less painful than feared.
The S&P 500 rose 0.8% to 6,791.69, topping its prior all-time high set earlier this month. The Dow Jones Industrial Average rallied 1% to 47,207.12, also a record.
The Nasdaq composite climbed 1.1% to a record of 23,204.87.
The data on inflation was encouraging because it could mean less pain for lower- and middle-income households struggling with still-high increases in prices. Even more importantly for Wall Street, it could also clear the way for the Federal Reserve to keep cutting interest rates in hopes of giving a boost to the slowing job market.
In other dealings early Monday, U.S. benchmark crude oil gave up early gains, dropping 66 cents to $60.84 per barrel. Brent crude, the international standard, declined 67 cents at $64.53 per barrel.
The U.S. dollar rose to 152.77 Japanese yen from 152.85 yen. The euro rose to $1.1639 from $1.1636.
