Asian Equities Recover from Weak Start as Xi Moves to Lower Tarrifs on US Goods

By Investors Hub

Asian stocks recovered from a weak start to close broadly higher on Tuesday after Chinese President Xi Jinping promised to lower import tariffs on products including cars and take other steps to further open the world’s second-largest economy, helping soothe investor jitters over an escalating trade dispute with the United States.

China’s Shanghai Composite Index jumped 52.36 points or 1.7 percent to close at 3,190.65 after Xi sought to defuse trade tensions with the U.S. by lifting limits of foreign investment in automobile and aircraft industries. Hong Kong’s Hang Seng index surged up 499.16 points or 1.7 percent to 30,728.74.

Japanese shares surged, led by automakers after Xi said his government would “significantly lower” tariffs on vehicle imports this year and raise the foreign ownership limit in the automobile sector “as soon as possible.”

The Nikkei 225 Index rose 116.06 points or 0.5 percent to 21,794.32, while the broader Topix index ended up 0.4 percent at 1,731.94. Honda Motor rallied 2.6 percent, Toyota Motor advanced 1.4 percent and Mazda Motor added 0.8 percent.

Industrial robot maker Fanuc climbed 3.3 percent and construction machinery maker Komatsu jumped 2.9 percent.

On the data front, Japanese consumer confidence held steady at the end of the first quarter, survey data from Cabinet Office showed. The seasonally adjusted consumer confidence index came in at 44.3 in March, unchanged from February.

Australian shares rose sharply as higher base metal prices following the remarks by Xi on opening up the world’s second-largest economy helped lift mining stocks.

The benchmark S&P/ASX 200 Index climbed 48.30 points or 0.8 percent to close at 5,857.00, while the broader All Ordinaries Index ended up 47.10 points or 0.8 percent at 5,951.80.

Mining heavyweights BHP Billiton and Rio Tinto rose 0.8 percent and 2.8 percent, respectively, while smaller rival Fortescue Metals Group rallied 3.7 percent and South32 jumped 5.1 percent. The big four banks rose between 1.1 percent and 1.5 percent.

Australian consumer confidence weakened for the third straight time during the week ended April 8th, a weekly survey compiled by the ANZ bank and Roy Morgan Research showed.

Another survey from National Australia Bank revealed that Australian business conditions weakened in March from record highs.