Asian stocks rise on signs of easing Sino-US trade tensions

Asian stocks rise on signs of easing Sino-US trade tensions

SINGAPORE, May 2 (Reuters) – Asian stock markets and U.S. futures rose on Friday as signs of possible trade talks between the U.S. and China lifted risk sentiment after lacklustre earnings from tech bellwethers Apple and Amazon fuelled worries about the impact of tariffs.

China’s commerce ministry said on Friday the United States has repeatedly expressed its willingness to negotiate on tariffs and that Beijing’s door is open for talks.

The comments helped U.S. stock futures reverse course from earlier falls after Apple (AAPL.O), trimmed its share buyback program and warned tariffs could add about $900 million in costs this quarter.

Futures for S&P 500 rose 0.6% while those for Nasdaq were 0.3% higher. Japan’s Nikkei (.N225) gained 1% on a weaker yen and Taiwan stocks (TWII) surged 2%.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.4%.

“They’ve struck a cautious tone, demanding that the U.S. ‘show sincerity’ if they want trade talks,” said Matt Simpson, senior market analyst at City Index.

“So while olive branch has been offered, you can hardly say China has ‘come crawling’ like Trump had hoped.”

Still, investor sentiment turned up on the comments as markets continue to grapple with President Donald Trump’s erratic tariff policies that have sparked fears of a sharp global economic downturn.

Data this week showed the U.S. economy shrank for the first time in three years in the first quarter, while China’s factory activity contracted at the fastest pace in 16 months in April.

Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia, said the main impact on the economy from tariffs will be felt when consumer prices rise.

“A recession will become likely if the price increases encourage consumers to cut spending and businesses to shrink workforces and cut capital spending. While a recession is not our baseline, it will be a close call this year.”

The earnings season so far has underscored the cost of the rapidly shifting U.S. trade policy with many companies slashing or pulling their profit forecasts.

to be continued..