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Global Markets Surge as US Drops Tariff Threat
22 Jan
Summary
- Hong Kong stocks rebounded, mirroring a global rise in risk assets.
- US President Trump announced an agreement with NATO regarding Greenland.
- Japan's bond market stabilized after a significant sell-off.
Hong Kong's stock market saw an uptick on Thursday, aligning with a worldwide recovery in risk assets. The Hang Seng Index rose by 0.4 percent, and the Hang Seng Tech Index saw a modest gain of 0.2 percent. Mainland Chinese markets also performed well, with the CSI 300 Index climbing 0.5 percent and the Shanghai Composite Index adding 0.4 percent.
Investor sentiment was bolstered after US President Donald Trump indicated at the Davos Economic Forum that an agreement had been reached with NATO concerning Greenland, thereby averting a threatened 10 percent tariff on Europe. While specific details of the Greenland agreement remain undisclosed, the de-escalation of trade tensions significantly boosted market confidence.
Further support for stock markets came from a rebound in long-dated Japanese government bonds, attributed to buying activity from insurers and market stabilization efforts by financial officials. A decrease in bond yields generally enhances the attractiveness of stocks as a risk asset. Other key Asian markets, including Japan's Nikkei 225, South Korea's Kospi, and Australia's S&P/ASX 200, all registered gains.
