Asian markets resume rally on earnings hopes, trade optimism

The gains put a regional equities rally back on track after last week’s stutter, supported by data last week showing a sharp jump in credit growth in China as easing measures kick in, while exports beat expectations and inflation perked up.

New York’s three main indexes provided a positive lead after Wall Stret titan JP Morgan recorded a pick-up in profits, suggesting the economy remains in rude health and fuelling optimism for upcoming corporate reports.

“The environment of easier financial conditions is beginning to have an impact on the broader economy,” Binay Chandgothia at Principal Global Investors told Bloomberg TV.

“If that is the case and growth does pick up, you’ll see an uptick in analyst expectations and earnings as well, which should help continue the rally.”

In early trade Hong Kong was up 1.1 percent while Shanghai jumped 1.8 percent, with investors looking ahead to the release of Chinese growth figures Wednesday.

Tokyo went into the break 1.5 percent higher, Singapore gained 0.2 percent, while Wellington added 0.4 percent and Seoul and Taipei both jumped 0.7 percent.

Manila and Jakarta were also up though Sydney edged down slightly.

Investors were back in a buying mood after last week’s gyrations that came on the back of concerns about a possible new trade war between the US and the European Union as Trump threatened to hit the bloc with tariffs over subsidies to aviation giant Airbus.

Buying was also being supported by comments from Treasury Secretary Steven Mnuchin, who said at the weekend that he was “hopeful we’re getting close to the final round of concluding issues” on the China trade talks.

The remarks were picked up as another positive sign that the trade war between the world’s top two economies, which helped hammer global markets last year, could be nearing an end.

The International Monetary Fund said the world economy should start to bounce back towards the end of the year, as long as China and the US resolve their differences.

US officials are also kicking off two days of trade talks with Japan later in the day in Washington with both sides previously saying they wanted to reach an agreement quickly.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 1.5 percent at 22,190.71 (break)

Hong Kong – Hang Seng: UP 1.1 percent at 30,232.57

Shanghai – Composite: UP 1.8 percent at 3,245.58

Pound/dollar: UP at $1.3090 from $1.3071 at 2040 GMT on Friday

Euro/pound: DOWN at 86.37 pence from 86.43 pence

Euro/dollar: UP at $1.1313 from $1.1298

Dollar/yen: UP at 112.01 yen from 111.99 yen

Oil – West Texas Intermediate: DOWN 41 cents at $63.48 per barrel

Oil – Brent Crude: DOWN 28 cents at $71.27 per barrel

New York – Dow: UP 1.0 percent at 26,412.30 (close)

London – FTSE 100: UP 0.3 percent at 7,437.06 (close)