Japan stocks surge almost 3% as China says it will trim tariffs on some US goods - CNBC

Stocks in Asia jumped on Thursday afternoon as investors in the region reacted to positive developments on the U.S.-China trade front.

Beijing said Thursday it would halve tariffs on hundreds of U.S. imports from 1:01 p.m. on Feb. 14, according to a statement on the Ministry of Finance's website. The ministry, based in Beijing, did not specify what time zone.

The statement said the move was made in order to "advance the healthy and stable development of China-U.S. trade."

The adjustment would apply to about $75 billion worth of imports from the U.S. that China slapped with tariffs on Sept. 1, 2019, according to a separate statement on the ministry's website.

Stocks in Japan led gains among major regional markets, with the Nikkei 225 up 2.79% and the Topix index gaining 2.4%.

Meanwhile, Hong Kong's Hang Seng index jumped 2.49%. In mainland China, the Shanghai composite rose about 1.2% while the Shenzhen composite surged 2.454%. The Shenzhen component advanced 2.31%.

South Korea's Kospi also added 2.42%.

Elsewhere, Australia's S&P/ASX 200 gained 1.02%. A Thursday data release by the Australian Bureau of Statistics showed the country's retail sales turnover declined 0.5% on a seasonally adjusted basis in December as compared to November.

Overall, the MSCI Asia ex-Japan index was 1.58% higher.

U.S. futures also pointed to strong gains for the major indexes when they open on Thursday morning stateside. As of 12 a.m. ET Thursday, Dow Jones Industrial Average futures rose 198 points, implying an opening gain of 207.15 points for the index. S&P 500 and Nasdaq futures also pointed to gains for the two indexes at the open on Thursday.

Coronavirus updates

The moves came as investors digested overnight developments on the coronavirus outbreak, following unconfirmed reports of breakthroughs in the development of a drug for the disease.

Reuters cited reports on Wednesday that said a research team at Zhejiang University had found a drug to treat people infected by the new coronavirus. The World Health Organization, however, said in a statement: "There are no known effective therapeutics against this 2019-nCoV."

Meanwhile, a scientist leading the U.K.'s research into a coronavirus vaccine told Sky News on Wednesday that his team had made a "significant breakthrough" by cutting a portion of the normal development time to 14 days from two to three years.

UOB Private Bank's Francis Tan told CNBC on Thursday that two factors are driving market movements. Firstly, the investment strategist said, the market is anticipating that a "vaccine should be coming soon."

"The second factor, which I think is a lot more important especially since the global financial crisis after (2008 and 2009), is that there's ample liquidity in the market," Tan told CNBC's "Street Signs" on Thursday. "Any time we see a pullback in the risk assets, (the) market seems to be ready to pump in more liquidity thinking that: 'Hey this is a great opportunity, a draw down of 2 to 3%, maybe it's time for us to get back at a lower price.'"

"That doesn't give me comfort because if you look at the numbers … the rate of increase on a daily basis is still going higher," he said. "There could still be drawdowns and the market is just pumping in more liquidity."

As of Wednesday night, the virus has already killed more than 500 people in China while more than 28,000 have been infected, according to the country's National Health Commission.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.307 after rising from lows around 97.9 earlier.

The Japanese yen traded at 109.95 per dollar after weakening from levels below 109.5 yesterday. The Australian dollar changed hands at $0.6758 after touching an earlier low of $0.6741.

Oil prices advanced in the afternoon of Asian trading hours, with international benchmark Brent crude futures adding 1.74% to $56.24 per barrel. U.S. crude futures also gained 2.29% to $51.91 per barrel.

Here's a look ahead at what's on tap today:

• India: Reserve Bank of India policy statement at 2:15 p.m. HK/SIN
• Philippines: Bangko Sentral ng Pilipinas Monetary Board Meeting & Decision at 4:00 p.m. HK/SIN

— CNBC's Fred Imbert and Evelyn Cheng contributed to this report.

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https://www.cnbc.com/2020/02/06/asia-markets-coronavirus-sp-500-australia-trade-data-in-focus.html

2020-02-05 23:37:00Z
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