U.S., Asian Stock Markets Boosted by Improved Prospects for U.S.-China Trade Deal

The major Asia/Pacific stock markets are trading higher on Wednesday, buoyed by optimism over U.S.-China trade relations at the start of high level negotiations in Beijing. Also underpinning the indexes is the softer tone from U.S. President Donald Trump, who said he was open to postponing the March 2 deadline for tariffs if Washington and Beijing can reach a trade deal soon.

At 04:24 GMT, China‘s Shanghai Index is trading 2697.11, up 25.21 or +0.94%. Hong Kong’s Hang Seng Index is at 28397.24, up 225.91 or +0.80%. South Koreans KOSPI Index is trading 2200.00, up 9.53 or +0.44%. Stocks are down in Australia with the S&P/ASX 200 Index at 6063.60, down 15.50 or -0.25%.

The major Asian markets are following the lead of Wall Street which produced stellar gains on Tuesday. Both regions are being under pinned by the positive view on U.S.-Chinese relations, while the U.S. markets are getting an extra boost by the news that the government shutdown may be averted.

Technical Move Boosts Benchmark S&P 500 Index

In the U.S. on Tuesday, the benchmark S&P 500 Index closed about its 200-day moving average for the first time since December 3. The rally was fueled by strong performances in the materials, consumer discretionary and financial sector.

The material sector benefited from the positive sentiment over U.S and China. Caterpillar, Boeing, Deere and 3M were the big gainers in that sector. The consumer discretionary sector was supported by the deal to prevent the government shutdown.

Broad gains in shares of a few big banks helped drive the strong performance in the financial sector. Goldman Sachs, Citigroup and Morgan Stanley all rose at least 1.6 percent. The SPDR S&P Bank ETF (KBE) gained 1.2 percent. Rising at least 1 percent were shares of Bank of America and J.P. Morgan Chase.

Technology stocks were led higher by strong performances in Amazon, Netflix and Alphabet, which all rose more than 2 percent. Apple trailed a little with a 0.86 percent gain.

Fed Speakers Powell and George

On Tuesday, Fed Chair Jerome Powell said that the nations prosperity has not been felt in many such areas around the country. He added that many rural areas had been left out and needed special support, such as access to affordable credit to start small businesses and high-quality education to train workers.

Powell did not address the future course of interest rates or the Feds decision last month to perhaps take a pause in future rate hikes.

Kansas City Federal Reserve Bank President Esther George on Tuesday said she supported a pause in interest rate increases so that the Fed could assess how much its past hikes have slowed the economy.

“Let‘s step back and see what happens,” George told an audience in Kansas City, describing her support for the U.S. central bank’s move last month to signal it was not preparing more rate increases for now.