Asia shares bounce from two-month lows as trade war fears ease
Asian shares bounced from two-month lows on Thursday as world equities recovered from a selloff triggered by escalating Sino-U.S. trade tensions, with investors hoping a full-blown trade war between the world's two biggest economies can be averted.
Sentiment was lifted as the United States expressed willingness to negotiate a resolution to the trade fight after the proposed U.S. tariffs on $50 billion in Chinese goods prompted a quick response from Beijing that it would retaliate by targeting key American imports.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) rose 0.5 percent, a day after it hit its lowest in almost two months. Trade-dependent Singapore's Straits Times Index (STI) rose more than 2.0 percent.
Japan's Nikkei (N225) gained 1.6 percent while markets in mainland China, and those in Hong Kong and Taiwan, are closed for the Tomb Sweeping Day holiday on Thursday.
U.S. S&P 500 mini futures (ESc1) rose 0.4 percent in Asia.
On Wednesday, the S&P 500 (SPX) gained 1.16 percent and the Nasdaq Composite (IXIC) added 1.45 percent, clawing back heavy losses of more than 1.5 percent right from earlier in the U.S. session.
"I think that the substance of trade restrictions and their real impact will be far less than the headlines," said Jeffery Becker, Chairman and CEO at Jennison Associates in New York. "U.S. and Chinese cross border trade has grown significantly over the last decade and economic inter-dependence runs very deep, deeper than the actual trade numbers. And both countries have a lot to lose by escalating a trade war."
Many investors viewed U.S. President Donald Trump's latest tariffs plan as part of his negotiation strategy, rather than his final policy.
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