Following on from an outstanding American session yesterday evening, the Asian and European markets got a boost on Thursday as China halved tariffs on 1717 goods imported from the US.
Though technically a reaction to the ‘phase one’ agreement struck between Beijing and Washington, the timing of China’s announcement can clearly be read as an attempt to further mollify investors’ anxiety surrounding the impact of the coronavirus on the country’s economy. After all, if there’s one thing the markets will care about more than the illness, it’s the relationship between the two superpowers.
In response the Shanghai Composite jumped 1.7%, with the Nikkei adding 2.4%. In contrast the European gains were pretty tepid. Nevertheless, a 0.3% rise from the FTSE hefted it across 7500 for the first time in over a week; meanwhile a half a percent increase from the DAX put a fresh all-time high back on the table.
As for the Dow Jones, after surging close to 500 points on Wednesday – fuelled by reports of a treatment for the coronavirus, a far, far better than forecast ADP nonfarm reading and a strong services PMI – it is expected to climb another 170 points when the bell rings on Wall Street. That would push the index to a record peak of 29450 – not back given it was trading the wrong side of 28250 at the end of January.
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