Asia Stock Market Update: Chinese Shares Lead Gains on U.S. Trade Optimism; Fed Meeting in Focus

Date: May 6, 2025 | Source: www.dailyforex.pk

Asian stock markets traded higher on Tuesday, with Chinese equities taking the lead amid renewed optimism over potential U.S.-China trade talks. Investors also digested fresh services data from China while remaining cautious ahead of a key U.S. Federal Reserve meeting later in the day.

Chinese Markets Rally on Trade Deal Hopes China’s Shanghai Composite Index rose 0.8%, and the CSI 300 climbed 0.9%, as markets responded positively to trade-related optimism. Hong Kong’s Hang Seng Index also advanced by 0.5%.

The gains followed comments by U.S. Treasury Secretary Scott Bessent, who told CNBC that progress in U.S.-China trade talks could materialize in the coming weeks. U.S. President Donald Trump added that talks with multiple countries, including China, were underway to establish fair trade agreements.

This renewed momentum comes after China’s commerce ministry confirmed last week that it was considering trade talks with Washington, provided they are grounded in sincerity and involve the removal of unilateral tariffs.

Chinese investors returned from a long weekend, driving buying momentum to catch up with the global optimism. However, services data released on Friday showed slower-than-expected growth in China’s service sector for April, slightly tempering investor enthusiasm.

Looking ahead, market participants are awaiting key Chinese economic indicators, including trade balance figures and consumer price index (CPI) data, due Friday.

Cautious Sentiment in Other Asia-Pacific Markets Trading volumes were thin across Asia as major markets such as Japan and South Korea remained closed due to public holidays.

Australia’s S&P/ASX 200 and Singapore’s Straits Times Index traded flat, as investors adopted a wait-and-see approach ahead of the U.S. Federal Reserve’s two-day policy meeting, which begins later today. The Fed is widely expected to keep interest rates unchanged, with markets focusing on Chair Jerome Powell’s remarks for clues on future rate moves.

Mixed Performance in Emerging Asian Markets

• Indonesia’s Jakarta Composite Index rose 0.7%.
• The Philippines’ PSEi Composite Index gained 0.4%.
• India’s Nifty 50 Futures edged down 0.1%, weighed by rising geopolitical tensions with Pakistan.

Market Outlook Global markets remain sensitive to developments in U.S.-China trade relations and the upcoming Fed decision. While Asian equities are showing cautious optimism, much will depend on the outcome of the Fed meeting and progress on tariff negotiations between the world’s two largest economies.

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