Donald Trump’s return to the White House has created a stir in global markets, especially Chinese stocks. As soon as he assumed the presidency, Trump talked about imposing 25% tariff on Canada and Mexico and said that a decision on this would be taken before February 1. However, no concrete timeline was given for China, which provided tremendous support to Chinese stocks.
Rise in Chinese stocks
- The Hang Seng China Enterprises Index rose more than 1%.
- China Mainland’s benchmark CSI 300 jumped nearly half a percent.
- Due to non-announcement of new tariffs on China, buying in the market intensified.
Chinese shares are the biggest gainers in Asia
As the Trump government returns to power, Chinese stocks are registering the fastest rise in Asia.
- Earlier scenario:
- The market was under pressure for months due to trade tensions and fears of tariffs.
- The MSCI China index was bullish.
- China’s offshore yuan had fallen to a record low.
Experts’ Opinion:
- Serena Zhou, economist at Mizuho Securities Asia Ltd., says the US could use the 60% tariff as a bargaining chip with China.
- However, he did not yet clarify when and how this strategy would be implemented.
impact on global market
Market Live strategist Mark Cudmore said Trump’s early sentiments are giving positive signals for global markets.
Key Points:
- Dollar decline:
The dollar is expected to continue falling due to Trump’s stance. - Rise in global stocks:
President Trump’s strategy is likely to boost global markets. - Expectation of China-US deal:
Last week, the call between Trump and Chinese President Xi Jinping created a positive atmosphere.- Trump called it “very good.”
- This indicates that the possibility of a deal between the two countries is increasing.
