Asian Markets Rise Amid Brexit Hope; Hong Kong Unrest, Sino-U.S. Trade in Focus

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© Reuters. © Reuters. – Asian markets traded higher in morning trade on Wednesday, bolstered by reports of progress in U.K. talks with the European Union over a Brexit deal.

China’s and the rose 0.1% and 0.3% by 10:30 PM ET (02:30 GMT) respectively. Beijing and Washington seemingly reached a partial “phase one” trade deal late last week, but reports on Tuesday suggested that China wants a rollback in tariffs before agreeing to purchase as much as $50 billion of U.S.-made agriculture products. Beijing also wants to hold more talks this month to hammer out certain details of the proposed deal, a Bloomberg report said yesterday.

Hong Kong’s climbed 0.6%. Chief Executive Carrie Lam is set to present her annual policy address later in the morning.

Her speech is expected to receive some attention as the city’s political crisis has put its economy on the brink of recession.

“I’m sure you agree that the most important livelihood issue that a chief executive should address would be housing and land supply,” Lam said on Tuesday.

Overnight, the U.S. House passed four measures, including the “Hong Kong Human Rights and Democracy Act”, on Tuesday in unanimous voice votes.

The bill gave support to pro-democracy protestors in Hong Kong as it provides sanctions against officials “responsible for undermining fundamental freedoms and autonomy in Hong Kong.”

Also passed was the “Protect Hong Kong Act, H.R. 4270”, which would stop the export of crowd-control devices such as tear gas and rubber bullets to Hong Kong.

China has vowed to take countermeasures against the U.S.

“If the relevant bill is finally passed into law, not only will it hurt Chinese interests and China-U.S. relations, but also seriously damage U.S. interests,” Geng Shuang, Ministry of Foreign Affairs spokesperson, said in a Chinese-language statement.

“Regarding the wrong decision of the U.S., the Chinese side will have to enact effective countermeasures, firmly safeguard Chinese sovereignty, security and development interests,” he added.

Japan’s surged 1.6%.

South Korea’s rose 0.8%. The Bank of Korea cut its policy rate for the second time this year and warned that growth would be weaker than forecast as a global economy hit by trade tensions slows.

The central bank slashed its main policy rate to 1.25%, in line with expectations.

Down under, Australia’s ASX traded 1.1% higher.

Asian stocks were supported by news overnight that boosted Brexit optimism.

European Michel Barnier said a draft legal text was being drawn up, and that an agreement “is still possible this week.”

“Our team(s) are working hard, and work has just started now today, this work has been intense over the weekend and yesterday, because even if the agreement will be difficult, more and more difficult, to be frank, it is still possible this week,” Barnier told reporters in Luxembourg on Tuesday morning.

He added that “any agreement must work for everyone,” saying it is “high time to turn good intentions into a legal text.”