Asian stocks rose across the board on Friday as a report of progress in U.S.-China trade talks stirred hopes of a deal in their tariff dispute and supported risk sentiment.
Spreadbetters expected European stocks to take their cue from Asia, with Britain's FTSE (FTSE) seen rising 0.45 percent, while Germany's DAX (GDAXI) and France's CAC (FCHI) were tipped to each gain 0.5 percent.
The Wall Street Journal reported on Thursday that U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30.
U.S. stocks rallied following the report, but pared some of those gains after a Treasury spokesperson told CNBC that Mnuchin had not made any such recommendations. WSJ also reported that U.S. Trade Representative Robert Lighthizer has resisted Mnuchin's idea. For the day, all three major U.S. indexes were up, led by a surge in industrial stocks. (N)
With equity markets having taken a knock on the trade tensions last year, even the whiff of progress in the months-long Sino-U.S. trade war was enough to boost risk sentiment. MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) added 0.55 percent. The index has gained 1.3 percent this week.
The Shanghai Composite Index (SSEC) was up 1 percent.
Australian stocks (AXJO) rose 0.5 percent, South Korea's KOSPI (KS11) advanced 0.6 percent while Japan's Nikkei (N225) gained more than 1 percent to a one-month high.
"As with 2018, the U.S.-China trade row remains a key market theme in 2019. A slight difference is that there are some signs that the two sides are seeking some sort of a resolution," said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo.
"China seems to be running low on options, while the United States would also want to avoid a prolonged conflict given the negative consequences on its markets and the economy," Monji said.
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