The Sydney market got off to a firmer start amid gestures of goodwill in the bruising U.S.-China trade war after U.S. President Donald Trump agreed to delay an additional hike in tariffs on Chinese goods due in October by two weeks, after China announced tariff exemptions for a basket of U.S. goods.
Investors expectation for a thaw in US-China trade frictions came as U.S. President Donald Trump said on Wednesday that increased tariffs on 250 billion dollars worth of Chinese goods (25% to 30%) that were set to kick in on October 1 have now been delayed to October 15 “as a gesture of good will. Trump said the decision was made at the request of Chinese Vice Premier Liu He and in consideration of the 70th anniversary celebrations of the People's Republic of China.
The world's two largest economies have been locked in a year-long battle over Beijing's trade practices that has threatened to push other economies into recession. The gestures of goodwill raise hopes both sides can narrow their differences before working-level resume talks in mid-September and high-level trade negotiations that are expected in October.
Investors also await an ECB meeting later on Thursday to see how far policymakers will go to support a flagging economy, given the risks posed by Britain's divorce from the European Union, commonly referred to as Brexit.
Financial stocks advanced, with the “Big Four” banks being notable gainers. Commonwealth Bank of Australia advanced as much as 1%.
Technology and healthcare stocks were also higher. Logistics software maker WiseTech Global climbed nearly 2%, while heavyweight drugmaker CSL climbed nearly 1%.
Materials and resources stocks gained on tracking a boost from a rise in iron ore prices. BHP Group rose as much as 0.8%, while Rio Tinto climbed. Major diversified miner South32 Ltd, however, shed as much as 1.4% as the company's stock was trading ex-dividend.
Energy stocks were major drag on the benchmark index due to a near 3% slide in the oil price overnight. Media reports suggested that President Trump has discussed a potential easing of oil sanctions on Iran, ahead of a possible meeting later this month. Whitehaven Coal declined as much as 2.6%, and oil and gas company Woodside Petroleum dropped about 1%.
CURRENCY NEWS: The Australian dollar rose against greenback on Thursday. The Australian dollar, sensitive to shifts in broader risk appetite, changed hands at $0.6884 after seeing an earlier low of $0.6857.
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