Asian Investors Cautiously Optimistic About Trade Talk Progress

The major stock indexes in Asia are trading higher early Friday with investors choosing to follow in Wall Street’s bullish footprints from Thursday’s session. Investors are tracking the progress of the U.S.-China trade negotiations which resumed yesterday. Firmer U.S. Treasury yields have also dampened concerns over a future recession, bringing some confidence back into the stock market.

At 03:42 GMT, Japan’s Nikkei 225 Index is trading 21232.93, up 199.17, or +0.95%. Hong Kong’s Hang Seng Index was at 29006.30, up 231.09 or +0.80% and South Korea’s KOSPI Index is trading 2134.66, up 6.56 or +0.31%.

The market in China is trading higher with the Shanghai Index at 3065.75, up 70.81 or +2.36%. Shares are higher in Australia with the S&P/ASX 200 trading 28.90 or 0.47% higher at 6205.00.

Low Volume, Low Volatility Highlighted

Volume and volatility are low as investors await news on the progress of the trade talks. The higher trade indicates an air of optimism at a time when falling global interest rates may be signaling a future recession according to some or at least a further weakening of the global economy.

Trade Talk Progress

On Thursday, it was reported that China has made unprecedented proposals in talks with the United States on a range of issues including forced technology transfer as the two sides continued to work to overcome remaining obstacles to a deal to end their protracted trade war, U.S. officials told Reuters.

U.S. officials were likely pleased with the news because the proposals China put on the table went further than in the past. One of four senior U.S. administration officials who spoke to Reuters said the new proposals included technology transfer. If you recall, when President Trump first implemented his tariffs, one of his demands was for Beijing to end practices that Washington alleges result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies.

One official speaking on condition of anonymity said, “If you looked at the texts a month ago compared to today, we have moved forward in all areas. We aren’t where we want to be.”

“They’re (China) talking about forced technology transfer in a way that they’ve never wanted to talk about before – both in terms of scope and specifics,” he said.

If anything, today’s early Asian trade suggests investors are cautiously optimistic.