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Asian market shares traded cautiously on Thursday as various traders await progress on the latest tariff talks between the U.S. and China, the failure of which can result in a sharp increase in duties imposed on billions of Chinese imports.

As Chinese President Xi Jinping prepares to meet with U.S. officials on Friday, negotiators representing the world’s two largest economies initiated discussions seeking to find a resolution to the ongoing trade conflict which has already impacted global economic growth. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met with Vice Premier Liu He on Thursday at Beijing’s State Diaoyutai Guesthouse to begin high-level talks.

In light of the latest developments, several Asian markets recorded a modest increase.
In the wider region of the Asia-Pacific and outside Japan, shares indexed by MSCI gained slightly at 0.3 percent, a rate last recorded in early October.

Japan’s Nikkei Index saw a milder increase of 0.05 percent, its highest percentage gain for the year so far, buoyed by a rise in export stocks caused by a weakening yen.

In South Korea, the Kospi edged up 0.3 percent to 2,197.50. Hong Kong’s Hang Seng, meanwhile, rose nearly 4 percent to 28,270.46 while the Shanghai Composite index rose 1.8 percent to 2,721.07.

The Australian stock market also saw an increase on Thursday with the benchmark S&P/ASX 200 adding 14.80 points or 0.24 percent reaching 6,078.40.

Both the U.S. and China are attempting to reach an agreement before a scheduled increase in tariffs beginning March 1. The ongoing trade conflict is perceived as being detrimental to the export-dependent Asian region with global growth and business confidence having already suffered the implications of the dispute.

Notwithstanding tensions between the U.S. and China, Beijing beat expectations by recording a staggering 9.1 percent in exports in January, confounding forecasts of a decrease in offshore shipments by 4 percent in the face of weakening demand. Meanwhile, data released on Thursday showed a decrease in the country’s imports albeit only slight – at 1.5 percent.

As a result of the rise in exports, China’s latest trade surplus stands at US$39.16 billion dollars — much lesser than the country’s last recorded surplus of US$57 billion but nonetheless surpassing surveys which forecasted the January surplus at US$25 billion.