Asian markets edge higher as US-China trade talks show signs of progress
Published: 10 June 2025, 2:47:45
Asian stocks posted modest gains on Tuesday, buoyed by optimism surrounding ongoing US-China trade negotiations, which entered a second day in London.
Hopes that the talks will defuse tensions between the world’s two largest economies lifted investor sentiment, building on Monday’s rally and mirroring a largely positive session on Wall Street.
US President Donald Trump’s top economic adviser, Kevin Hassett, struck an upbeat tone, telling CNBC that he expected a “big, strong handshake” to conclude the talks. Hassett suggested that the Trump administration may ease recent restrictions on tech exports and that China would increase the release of critical rare earth minerals, which are essential for industries ranging from electronics to electric vehicles.
The talks follow a recent phone call between Trump and Chinese President Xi Jinping and come after a meeting in Geneva last month, where both sides agreed to reduce tit-for-tat tariffs. However, US officials have since accused Beijing of not fully honoring the deal, particularly in regard to the slow release of rare earth supplies.
Despite the tension, Hassett said, “Our expectation is that after the handshake, any export controls from the US will be eased, and the rare earths will be released in volume.”
Markets responded positively, with Tokyo’s Nikkei 225 leading the region with a 1.0% gain to 38,473.97. Hong Kong’s Hang Seng Index rose 0.4% to 24,275.16, and Shanghai’s Composite Index added 0.2% to reach 3,405.64. Other markets, including Sydney, Seoul, Singapore, Taipei, Wellington, and Jakarta, also posted gains.
Pepperstone analyst Chris Weston noted, “The bulls will layer into risk on any rhetoric that publicly keeps the two sides at the table,” adding that the meeting’s extension into a second day suggests a willingness to reach at least a loose agreement.
However, caution lingers among investors as they await key US inflation data due later this week. The data could influence the Federal Reserve’s monetary policy, especially amid concerns that renewed tariffs could further fuel inflation. While President Trump continues to pressure the Fed to cut interest rates, recent economic indicators, including strong job numbers, may support holding rates steady.
Analysts at Allspring Global Investments warned that while a strong US consumer base has helped stabilize the global economy, “the current global trade war coupled with big spending cuts by the US government and possibly higher US inflation could derail US consumer spending to the point that the global economy contracts for multiple quarters.”
Key market figures (as of 02:30 GMT):
Tokyo – Nikkei 225: UP 1.0% at 38,473.97
Hong Kong – Hang Seng Index: UP 0.4% at 24,275.16
Shanghai – Composite: UP 0.2% at 3,405.64
Euro/dollar: DOWN at $1.1394 from $1.1420
Pound/dollar: DOWN at $1.3530 from $1.3552
Dollar/yen: UP at ¥145.14 from ¥144.60
Euro/pound: DOWN at 84.21 pence from 84.27
WTI crude: UP 0.5% at $65.61 per barrel
Brent crude: UP 0.5% at $67.37 per barrel
New York – Dow Jones: FLAT at 42,761.76
London – FTSE 100: DOWN 0.1% at 8,832.28
