Stock Market Revival: What the Easing China-US Trade Fears Mean for Investors and Businesses in Oman
Hong Kong: Equity markets experienced gains on Monday following reassuring remarks from Donald Trump over the weekend that alleviated concerns regarding trade tensions between the United States and China. Notably, Tokyo’s stock market surged to unprecedented heights on news of an agreement to resolve political instability in Japan.
Investor optimism was bolstered by data indicating that China’s economy grew in line with expectations during the third quarter. This positive sentiment was further enhanced by a rebound on Wall Street, where all three major indexes recovered from prior losses. Last week, market confidence had been shaken by a renewed escalation in the trade standoff, with President Trump threatening to impose a 100 percent tariff on Chinese goods in response to new restrictions on rare earth exports from China. This announcement led to reciprocal measures and speculation that a planned meeting with Chinese President Xi Jinping might not occur.
Fortunately, over the weekend, tensions appeared to ease as both sides agreed to pursue further trade discussions. Chinese state media reported that Vice Premier He Lifeng and U.S. Treasury Secretary Scott Bessent engaged in "candid, in-depth and constructive exchanges" during a phone call, agreeing to a new round of negotiations "as soon as possible." Shortly before this call, excerpts from an interview with Trump revealed that he would still meet Xi at the APEC summit, remarking that the proposed 100 percent tariff was "not sustainable." This softer tone led to an upswing in Asian markets, with Hong Kong rising more than two percent and Shanghai also seeing significant gains, even though the data confirmed that China’s growth was at its slowest pace in a year. This information was released just before a key four-day meeting in Beijing focused on long-term economic planning.
Other markets, including Sydney, Seoul, Wellington, Taipei, Mumbai, Bangkok, and Manila, also saw positive movement, along with London, Paris, and Frankfurt. Chris Weston from Pepperstone noted, "Catalyzed by Trump’s remarks, markets appear primed for a positive—or at least less negative—outcome." He added that the current market sentiment suggests China may be willing to make concessions regarding its rare-earth export controls, potentially extending the existing 30 percent "tariff truce" by an additional 90 days beyond the November 10 deadline.
Tokyo’s market led the gains with an impressive rise of over three percent to a new record high, following the ruling party’s announcement of a new coalition agreement that would enable Sanae Takaichi to become Japan’s first female prime minister. Last week, her candidacy faced difficulties when a coalition partner withdrew support after she won her party’s leadership earlier in the month.
Traders were also encouraged by a recovery in U.S. regional bank stocks on Friday, which had previously suffered after two mid-sized banks reported anticipated losses from troubled loans. The resurgence of institutions like Zions Bancorp and Western Alliance Bancorporation, along with others, suggested decreasing investor fears about systemic issues.
Key figures as of approximately 0715 GMT:
- Tokyo – Nikkei 225: Up 3.4% at 49,185.50 (close)
- Hong Kong – Hang Seng Index: Up 2.3% at 25,838.94
- Shanghai – Composite: Up 0.6% at 3,863.89 (close)
- London – FTSE 100: Up 0.3% at 9,382.39
- Euro/dollar: Down to $1.1664 from $1.1670 on Friday
- Pound/dollar: Down to $1.3423 from $1.3433
- Dollar/yen: Up to 150.59 yen from 150.50 yen
- Euro/pound: Down to 86.87 pence from 86.88
- West Texas Intermediate: Down 0.9% at $57.01 per barrel
- Brent North Sea Crude: Down 0.9% at $60.77 per barrel
- New York – Dow: Up 0.5% at 46,190.61.
Special Analysis by Omanet | Navigate Oman’s Market
Recent positive market sentiment stemming from eased US-China trade tensions presents new opportunities for Oman’s businesses to leverage potential supply chain shifts. However, firms must remain vigilant, as the geopolitical landscape is still volatile and could introduce risks associated with fluctuating tariffs. Smart investors and entrepreneurs in Oman should consider diversifying their portfolios and exploring partnerships that align with these emerging global market trends.
