Asian stocks rise on renewed trade optimism and easing fears of hard Brexit
- Asian investors are buying risk in response to renewed optimism on the trade front.
- The US and China will be holding talks in October.
- Fading prospects of a hard Brexit are likely to the bullish pressures around equities.
Asian equities are in a sea of green, courtesy of new optimism on a possible US-China trade dispute resolution and the fading prospect of a hard Brexit.
Scorecard
As of writing, Japan's Nikkei is adding 490 points or 2.37% and the S&P/ASX 200 is trading 55 points or 0.84%. Stocks in Hong Kong and South Korea are also flashing green and the Chinese equities are up 1.5%. Notably, the Shanghai Composite index has risen above 3,000 levels.
Risk appetite rose after a US Treasury spokesman said late on Wednesday that the US and China will hold trade talks in Washington in October. Further, news that Hong Kong leader Carrie Lam was withdrawing an extradition bill
The US stocks put on a good show in the overnight trade with the S&P 500 adding 1.08%. The sentiment was likely buoyed due to vote by the UK lawmakers to prevent Prime Minister Boris Johnson from taking Britain out of the European Union without a trade deal on Oct. 31.
It remains to be seen how long the positive mood lasts. After all, the risk-on action hasn't lifted bond yields. For instance, the 10-year US Treasury yield is currently flat-lined around 1.484%. The risk-on would look sustainable if the haven demand for treasuries drop, resulting rise in yields.
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
