NEW YORK, NY – Asian shares followed Wall Street higher on Tuesday amid optimism that a trade deal between the U.S. and China will be a boon for the regional economy.
Japan's benchmark Nikkei 225 rose 0.7% in morning trading to 24,026.10, while Australia's S&P/ASX 200 added 0.6% to 6,946.80. South Korea's Kospi gained 0.8% to 2,246.88. Hong Kong's Hang Seng edged up 0.1% to 28,990.45, while the Shanghai Composite was up nearly 0.2% at 3,120.72.
Monday's rally on Wall Street added to gains from last week driven by an easing of tension between the U.S. and Iran. Investors are now looking ahead to the signing of an initial trade deal between Washington and Beijing and the potential for future talks.
The world’s largest economies are expected to sign a so-called “Phase 1” trade agreement on Wednesday. It is being viewed as an opening to future negotiations that will deal with more complicated trade issues.
Investors' “unquenchable appetite for stocks is in hyperdrive” thanks to the thawing tensions between the U.S. and both China and Iran, Stephen Innes, chief Asia market strategist at AxiTrader, said in a report.
Even a partial deal between Washington and Beijing should remove much of the uncertainty that has weighed on companies and investors, at least until after the U.S. presidential election in November, said Scott Ladner, chief investment officer for Horizon Investments in Charlotte.
“We don't think the tariff overhang is going to be very relevant over the next nine months,” Ladner said. “Acting tough with China and imposing tariffs two years before an election is a very different story than doing it two months before an election.”
The S&P 500 index rose 22.78 points, or 0.7%, to 3,288.13 on Monday. The Nasdaq composite, which is heavily weighted with technology stocks, climbed 95.07 points, or 1%, to 9,273.93. The S&P and Nasdaq previously set new highs last Thursday.