Asian stocks record an 18-month high amidst the trade optimism and positive economic signals for China

Tuesday brought good news for the Asian stock market. Amidst the rising optimism regarding the U.S – China phase 1 trade deal that has supposedly been finalized, and the economic signals turning green for China, the Asian stock market printed an 18-month high. Events of Brexit, on the other hand, kept Sterling (-0.6%) under pressure.

Asia-Pacific Stocks Printed A Record High Since June 2018

The .MIAPJ0000PUS index that covers the broadest range of Asia-Pacific stocks except Japan’s, was seen trading 1% higher on Tuesday that marked the highest for the index since June 2018. Japan’s Nikkei .N225 was also reported to have noted a record high in over a year. Sources from Hong Kong, Seoul, and Shanghai, also announced the respective stock markets to have gained by over 1% on Tuesday. Owing to the prospect of higher demand from the top economies of the world, oil prices were also highlighted to be settling around the three-month high. However, since neither of the two largest economies of the world released a new official statement on Tuesday, the celebration was unable to penetrate into the forex or debt markets. The movement in both these markets remained insignificant. The response in the futures market wasn’t too optimistic either with the FFIc1, FTSE futures, Esc1, and FDXc1 indices last seen trading 0.3% down. As per Singapore’s Mizuho Bank’s head of economics and strategy, Vishnu Varathan, however, investors are poised to end the year on a positive note.

China To Double Its Purchase Of American Products As Per The Phase 1 Deal

As of Monday, Larry Kudlow announced in his capacity as the White House adviser that the terms and agreements of the phase 1 deal directs China to double its purchase of American products in the upcoming year. The United States will also reciprocate with reducing tariffs on a range of Chinese imports. While the deal is awaiting signature from both sides, the U.S Trade Representative (USTR), Robert Lighthizer, announced earlier this week that the deal is totally done. The Chinese economic data released on Monday also suggested the retail and industrial sectors in China doing better than expected, which further fueled the optimism in the Asian stock market. Following the phase 1 trade deal, the response in the three primary indices of Wall Street, Dow Jones, Nasdaq, and the benchmark S&P 500, was also somewhat similar. While the gain was rather feeble, the indices still managed to record the highest closing levels in history. The pan European STOXX 600 index was no different. Trading as high as 418, the index printed a record high as well. The UK’s blue-chip FTSE 100 index was also seen trading near its yearly high of 7,686.61.