Asian Stocks Subdued as Investors Watch Trump-Xi Meeting
Asian stocks were subdued on Thursday morning as investors closely watched the highly anticipated meeting between US President Donald Trump and Chinese President Xi Jinping. The two leaders met in Busan, South Korea, for high-stakes talks aimed at defusing the ongoing trade war between the world’s top two economies. This is their first meeting since 2019, and markets are eagerly awaiting potential breakthroughs.
The meeting follows a tech-fueled bull run in global markets, which was further boosted by an interest rate cut in the United States announced by Federal Reserve Chair Jerome Powell on Wednesday. However, Powell’s announcement also cast doubt on an additional rate cut in December, causing US markets to jolt and the value of the dollar to rise. The Nasdaq recovered, finishing at a fourth straight record after a gain by artificial intelligence giant Nvidia, which became the first company to reach a $5 trillion market value.
In Asia, main benchmarks were nearly flat during Thursday morning trading in Tokyo, Shanghai, and Sydney. Hong Kong and Taipei tracked moderate gains, while stocks in Seoul surged by over one percent, helped by tech giant Samsung Electronics posting a 32 percent rise in profits on-year for the third quarter. According to Lorraine Tan, director of equity research for the region at Morningstar, a “cautious reaction” is expected in Asia, as the decline in US rates provides more flexibility for Asian central banks to lower rates if needed.
The meeting between Trump and Xi began with a handshake and friendly greetings, with the two leaders expressing optimism about their relationship. Trump said they would have a “fantastic relationship for a long time,” while Xi stated that the two countries “should be partners and friends.” Markets have been boosted by comments from Trump expressing confidence that a sweeping deal can be struck with Beijing. Key issues that could be discussed include the supply of rare earth minerals, competition over artificial intelligence and computer chips, and geopolitical hotspots such as Ukraine and Taiwan.
As the meeting continues, investors are closely watching for any signs of progress or breakthroughs. The outcome of the talks is expected to have significant implications for global markets and trade. In the meantime, key figures show a mixed performance, with the Nikkei 225 up 0.1 percent, the Hang Seng Index up 0.5 percent, and the Shanghai Composite down 0.2 percent. The dollar-yen exchange rate is down, while the euro-dollar and pound-dollar exchange rates are up.
The meeting between Trump and Xi is a critical moment in the ongoing trade tensions between the US and China. As the world’s top two economies, the outcome of their talks will have far-reaching consequences for global trade, markets, and economic growth. Investors and analysts will be closely watching the developments, and any signs of progress or agreement will likely have a significant impact on market sentiment.