Asia stock traders hit ‘buy’ as US-China trade magic returns

Bloomberg

The power of news headlines is back, and a renewed dose of trade optimism is finally lifting Asian stocks from a six-week low.
To be exact, the regional benchmark is heading for its biggest jump since December 3, when the market reacted to Presidents Donald Trump and Xi Jinping’s dinner in Buenos Aires.
Huawei Technologies Co.’s chief financial officer was granted bail, and US President Donald Trump said he would intervene in the case if it would help win a trade deal with China. He told Reuters in an interview that the White House has spoken with the Justice Department about it, along with Chinese officials.
The MSCI Asia Pacific Index rose as much as 1.6 percent, and US stock-index futures moved higher.
Japanese equities led the pack in Asia as the Topix index closed up 2 percent, rebounding from the 18-month low. Hong Kong stocks jumped, helped by a rally in developers shares.
The market is coming back to life just as trading volume is poised to dwindle with the holiday season approaching. It’s also a sign headlines on US-China trade talks can still have a big impact.
As Bloomberg macro strategist Cameron Crise explains, the “stocks rally as optimism grows on China-US trade” narrative is one investors have been “binge-watching” all year.
But all of this doesn’t mean the market is out of the woods, according to Stephen Innes, head of trading at Oanda Asia Pacific Pte. Traders should continue to be sellers of risk assets as solving trade tensions is likely to be a “one step forward and two steps back” process, he said.
In India, equities advanced as investors welcomed a quick appointment of a central-bank governor who’s expected to shift away from a hawkish view. The Indian National Congress — the main political opposition of the Narendra Modi-led Bharatiya Janata Party — wrested power from the BJP in Madhya Pradesh, Rajasthan and Chhattisgarh, about six months ahead of a national vote.