Markets rallied after the US and China agreed on a 90-day ceasefire to their trade war. (Reuters: Damir Sagolj)
Foreign markets experienced a burst of optimism after the US and China agreed to a trade ceasefire, but it was unlikely to spread to the Australian market.
Markets at 7:45am (AEDT):
- ASX SPI futures -0.2pc at 5,758, ASX 200 (Monday’s close) +1.8pc at 5,771
- AUD: 73.5 US cents, 57.76 British pence, 64.78 Euro cents, 83.53 Japanese yen, $NZ1.06
- US: Dow Jones +1pc at 25,802, S&P 500 +1pc at 2,787, Nasdaq +1.4pc at 7,430
- Europe: FTSE 100 +1.2pc at 7,062, DAX +1.9pc at 11,465, CAC +1pc at 5,054, Euro Stoxx 50 +1.4pc at 3,218
- Commodities: Brent crude +4pc at $US61.83/barrel, spot gold +0.7pc at $US1,230.54/ounce, iron ore +0.7pc at $US66.38/tonne
ASX futures indicated the local share market may drop by 0.2 per cent at the open.
However, the Australian dollar lifted to 73.5 US cents and 57.7 British pence at 7:45am (AEDT).
US-China relief rally
Foreign markets rallied after Washington and Beijing agreed to pause their trade war until March 1, during which they will try to agree on a comprehensive trade deal.
If no deal is made before then, the Trump administration will increase tariffs on $US250 billion worth of Chinese imports — lifting the rate from 10 to 25 per cent.
It is essentially a 90-day truce, or an agreement to keep talking with each other.
The London and Paris benchmark indices rose by more than 1 per cent, while Frankfurt’s DAX rose 1.9 per cent.
On Wall Street, the industrial-skewed Dow Jones index added 263 points, or 1 per cent, to 25,802.
It was boosted by Boeing and Caterpillar, the two export-heavy companies which are most sensitive to trade disputes between the world’s two largest economies.
The Nasdaq index jumped 1.3 per cent, thanks to a bounce in the share price of Apple (+2.7pc), Amazon (+4.4pc), and several other major technology stocks.
Meanwhile, the benchmark S&P 500 gained 0.9 per cent. It was driven higher by energy stocks, after a rebound in oil prices overnight.
Brent crude rose 4 per cent to $US61.94 per barrel.
More to come.