Although in recent weeks the stock exchanges have been influenced (in both ways) by coronavirus, in today’s morning the stock rally found a raison d’etre in something else.
As many had predicted, and as officially confirmed by Beijing, China will cut tariffs previously imposed on goods imported from the USA. This was enough for the stock exchanges to take off: on the markets today the trade war.
Markets today: focus on trade war
The latest, exciting news on the duty front came from the Chinese Ministry of Finance, which confirmed the next reduction from 10% to 5% rates on certain categories of US goods and from 5% to 2.5% for others.
A particularly important novelty from the point of view of trade war which only a few weeks ago stopped scaring the stock exchanges (after the coveted signing of Phase 1).
Markets today celebrated increases of more than two percentage points on the announced adjustments which, apparently, will enter into force from February 14th next one. They will apply to those $ 75 billion of US assets affected by tariffs on September 1, 2019. At the moment, however, a specific list has not been disclosed.
The reduction of duties, reiterated the Chinese Ministry, will aim to stabilize and further improve the state of US-China relations, the two powers still trapped in a trade war that began long ago.
In a separate article published again on the official ministerial website, Beijing noted that the tariff cut was scheduled to coincide with the decision taken by the US in January and aimed at halve from 15% to 7.5% tariffs on 120 billion dollars of Chinese goods.
Markets today could not have hoped for better. Already in the last session, World stock exchanges they began to grind gains, supported by scientific progress made on the coronavirus front.
Apparently, in fact, some Chinese researchers have identified two drugs that can curb the effects of the epidemic. Despite the specifications and the braking of the WHO, the share took off and with it the price of oil.
The reaction of the stock exchanges
As usual, the Asian stock exchanges were the first to react to the tariff cut due to time constraints. Specifically, China has achieved amazing performances, with the SZSE Component in rallies of over 2% and with the rest of the indices rising by over 1.5%.
The performances of theHang Seng, which has touched progressions of 3 percentage points, those of the Nikkei over + 2% and those of Kospi (+ 2.77%).
As you can see, therefore, the markets today have temporarily left out the coronavirus and have returned to enjoying the progress on the trade war front.