Asia stocks gain on fresh trade hopes

Adam Haigh and Andreea Papuc, Bloomberg

Asian stocks bounced with US equity futures Wednesday after a report that the US and China have ironed out most of their differences in trade negotiations. Treasury yields rose toward 2.5%.

The MSCI Asia Pacific Index headed for a fresh six-month high after the Financial Times reported that while the US and China are still at odds on implementation and enforcement of a deal, most other roadblocks have been cleared.

Also helping sentiment was a better-than-forecast increase in a gauge of China’s services industries, adding to readings on manufacturing that showed improvement earlier in the week.

Hong Kong shares outperformed, with Japanese, Chinese and Korean equities seeing more modest gains. Australia’s dollar rose.

After a strong start to the week, and a big rebound last quarter, investors appear less eager to keep driving global stock prices higher. Now trade talks are set to regain focus, with Chinese Vice Premier Liu He leading a delegation of negotiators to Washington on Wednesday.

“We’re still in a state of flux and I think investors are just looking for any positive sign to sustain the rally or at least put a floor underneath where we are in the marketplace,” said Tom Stringfellow, president at Frost Investment Advisors, which has $3.68bn in assets under management.

Earlier, the S&P 500 Index ended little changed after being lower most of the session.

The pound fluctuated after Theresa May announced a proposal to break the logjam over Brexit.

May’s plan is to get a cross-party approach on the future relationship with the EU, secure Labour support for her divorce deal and thereby lock in the date of May 22 to leave the bloc.

Elsewhere, oil traded near a four-month high in New York as a further retreat in OPEC’s production signaled that global markets are tightening.