Asian Stocks Hit Best Quarterly Gain in Seven Years

Asian stocks surged on Monday and hit best quarterly gain in seven years. Economic activity in China bounced back unexpectedly and greatly influenced the Asian stocks’ increase.

Sino-U.S. negotiations were primary drivers of anticipations on a deal to end a tariff war, and on Friday, U.S. President Donald Trump described the trade talks between the two nations as “going very well”.

MSCI's broadest index of Asia-Pacific shares rose about nine percent in the first quarter of 2019, hitting its biggest quarterly gain since March 2012.

Chinese shares surged, with the Shanghai Composite gaining 2.58 percent to 3,170.36, while the Shenzhen Component reached 10,267.70, a 3.64 percent increase from the previously reported data.

The Hang Seng index was up 1.66 percent as it reaches the trading day’s close, while both the Caixin/Markit Manufacturing PMI and China's official PMI showed growth, with the latter rising to 50.5 from 49.2.

The global head of fixed income and commodity research at Danske Bank said that China’s PMI reading “was encouraging”.

“There is still a good chance that global and euro-zone growth will improve in coming quarters, as the U.S. and China will reach a trade deal, while the Fed’s dovish shift and China’s stimulus will help,” he added.

In Japan, the Nikkei 225 closed at 21,509.03, a 1.43 percent jump from the previous close, while the Topix index gained 1.52 percent, ending the trading day at 1,615.81.

Indian equities also reached their biggest monthly gain since March of 2016, gaining 7.7 percent.

Sri Lanka and Malaysia, however, declined 4.45 percent and 3.75 percent respectively.

Asian shares’ increase was greatly affected by the U.S. Federal Reserve’s dovish shift, and the European Central Bank’s adjusting its policy tightening plan to be effective in 2020, rather than earlier.

The United States and China will resume negotiations and trade-war talks this week with China Vice Premier Liu He to lead a group of representatives.

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