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Asian equity markets largely moved higher on Wednesday, buoyed by optimism over a potential conversation between U.S. President Donald Trump and Chinese President Xi Jinping aimed at reviving stalled trade negotiations. The prospect of renewed dialogue provided a lift to risk appetite across the region, with technology stocks and chipmakers leading gains.
South Korean Equities Surge Following Presidential Election
South Korea’s KOSPI index led regional gains, surging 2.4% to a 10-month high following the victory of Liberal party candidate Lee Jae-myung in Tuesday’s snap presidential election. The result is seen as a potential turning point for the country, bringing an end to a period of political instability following the controversial tenure of former President Yoon Suk Yeol.
Investors welcomed the prospect of a stable political climate and clearer economic policy. Lee’s platform emphasizes local economic growth and stronger diplomatic and economic ties with key partners, including the United States and Japan.
Inflation data released Wednesday also showed consumer price index growth in South Korea moderated in May, strengthening expectations for a potential rate cut by the Bank of Korea, further fueling equity optimism.
Chinese Markets Firm Ahead of Trump-Xi Call
China’s major indexes posted modest gains, with the CSI 300 up 0.5% and the Shanghai Composite rising 0.3%, while Hong Kong’s Hang Seng advanced 0.6%. The upward momentum followed news from the White House confirming that President Trump and President Xi are scheduled to speak this week.
The dialogue is expected to focus on reviving bilateral trade talks, which have stalled in recent weeks despite a temporary tariff truce agreed upon in May. The outcome of the Trump-Xi call will be closely watched as investors seek signs of a longer-term resolution.
Market sentiment in China was also supported by anticipation of further economic stimulus, although analysts suggest that substantial progress in trade negotiations may reduce the urgency for aggressive policy measures.
However, recent PMI readings indicated that U.S. tariffs have weighed on China’s manufacturing sector, with May showing a contraction driven by weaker export demand. This has added urgency to trade resolutions.
Australia Advances Despite Weak GDP Print
Australia’s ASX 200 index rose 0.7%, shrugging off a weaker-than-expected GDP report for the first quarter. Data pointed to sluggish growth amid weak consumer spending and external trade challenges, but also reinforced expectations that the Reserve Bank of Australia may deliver further interest rate cuts to support the economy.
Wall Street Futures Dip on Tariff Concerns
Despite the positive tone in Asian equities, U.S. stock futures edged lower during Asian trading hours. S&P 500 futures dipped 0.1% after President Trump signed an executive order doubling tariffs on imported steel and aluminum to 50%, stoking fears of higher inflation and cost pressures for U.S. manufacturers.
The move added a cautious note to otherwise upbeat sentiment, as investors brace for further policy developments from Washington.
Overall, Asian markets appear buoyed by hopes for diplomatic breakthroughs and political clarity. However, the path ahead remains closely tied to U.S. trade policy and evolving global geopolitical dynamics.
