HSI Soars As Trump Tweet Sparks An Asian Rally

Hong Kong stocks rallied more than 2 percent on Wednesday, fuelled by hopes of a trade breakthrough after US President Donald Trump said he would meet President Xi Jinping at the G20 meeting next week.

The Hang Seng Index jumped 2.6 percent, to 28,202.

On the mainland, the Shanghai Composite Index climbed almost 1 percent, to 2,917, while the Shenzhen Composite Index rose 1.5 percent, to 1,526.

Tokyo ended 1.7 percent higher, while Singapore put on 1.4 percent and Sydney gained 1.2 percent.

Taipei added 2 percent, while Wellington, Seoul, Manila, Jakarta and Bangkok each gained about 1 percent. Mumbai was also in positive territory.

The rally was sparked after Trump tweeted: "Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G20 in Japan. Our respective teams will begin talks prior to our meeting."

Analysts pointed out that it was in both of their interests to bring an end to the long-running dispute.

"There is strong incentive for both presidents to re-engage," said Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management.

"Trump is kick-starting his [re-election] campaign and he will need strong economic performance over the next 18 months. President Xi will also need trade tensions to cool down to support China's domestic economy, while pursuing financial market liberalisation."

The optimism underpinned a rally in riskier assets, with high-yielding currencies benefiting. South Korea's won jumped 0.8 percent, the South African rand added 0.9 percent and Indonesia's rupiah gained 0.4 percent.

The yuan, which has struggled in recent weeks, climbed 0.4 percent. (AFP)