21 May, 2018FORTUNE.COM
The news of a pause in the “trade war” between the U.S. and China has had a speedy and positive effect on the markets.
U.S. Treasury Secretary Steven Mnuchin said Sunday that the countries were “putting the trade war on hold” following talks last week in Washington, D.C.
There’s no detailed deal yet, but China has promised to step up its purchases of U.S. agricultural and energy goods and services. This is apparently tied to the U.S. easing restrictions on high-tech exports to China.
In China, both the CSI300 and Shanghai Composite indices ended Monday’s trading up, by 0.5% and 0.6% respectively. The news proved particularly buoyant for transport companies, such as Cosco Shipping, which ended the day up by 5.5%.
The Shanghai Composite Index gains took that benchmark to its highest levels in two months. Hong Kong’s Hang Seng rose by 1.3% at one point, but fell to a 0.6% gain at trading’s close, reportedly due to concerns over the strength of the U.S. dollar and higher U.S. interest rates.
The dollar gained around 0.3% on the news of the trade war pause. U.S. futures were up too--S&P by 0.6%, Nasdaq by 0.7% and the Dow by 0.9%--while the Stoxx Europe 600 index rose 0.3% on Monday morning.
“With tensions between China and the US now in at least temporary abeyance, markets should react positively to a situation which had threatened to derail the synchronised global economic recovery,” Richard Hunter of Interactive Investor told the Financial Times