15 Asian countries sign world’s biggest free trade deal
Markets in Singapore and Asia rallied after fifteen countries in the region signed an agreement to form the world’s largest trade alliance (RCEP).
Deal, signed on November 15, aims to gradually reduce tariffs and duties in many areas, reports Reuters. The Regional Comprehensive Economic Partnership is currently the largest trading bloc in the world. Excluding the United States Agreement marks the first time that East Asian powers China, Japan, and South Korea have entered into a comprehensive commercial alliance.
In Japan Nikkei 225 added 2.05% and closed at 25,906.93 points. Topix rose 1.68% to 1,731.81 points.
Japan’s economy rebounded sharply, expanding 21.4% year-on-year in Q3. The economy grew 5% quarterly, better than 4.4% forecasted and a sign of recovery from the damage caused by the pandemic.
South Korean Index Kospi rose almost 2% to close at 2543.03.
Mainland China shares are also showing positive dynamics. Shanghai composite increased by more than 1%. Industrial production in the country rises faster than expected in October, gaining 6.9%, statistics show. Retail sales continue to rebound, rising 4.3% year-on-year, but falling short of forecasts for 4.9% growth.
Hongkong Hang Seng index rose in the afternoon by 0.58%. Hong Kong-listed casino and financial stocks are doing particularly well. Standard chartered gained 4.80% and HSBC – 3.49%.
The Australian Stock Exchange ceased trading in stocks shortly after opening and was closed until the end of the day due to a software problem that created «inaccurate market data», said in a statement. The resumption of trading is expected tomorrow.
Indian markets closed for national holiday. Generally the broadest MSCI Asia-Pacific stock index outside of Japan increased by 1.28%.
Experts call a new deal «necessary for a comfortable trading life of the whole planet».
«The reach and ambition of the RCEP alliance, aiming to remove around 92% of tariffs on goods, will be critical for deepening supply chain ties», – market participants think.
Japanese exporters make significant gains amid news of union formation.
Concern Nissan soared by more than 5%, and Mazda jumped 6.82%. Mitsubishi gained 2.54%, and Honda almost 5%.
The country’s tech segment has also grown. Tokyo Electron and Panasonic jump by almost 5%. Softbank Group increased the cost of securities by 1.83%.
In South Korea, the situation is similar. Samsung Electronics grew by 4.91%, and SK Hynix by 9%.
IN USA stock futures showed growth on Sunday evening after S&P 500 posted a record high of the close and recorded a weekly gain of 2.2%. The Dow-Jones rose more than 4% last week and briefly hit a daily record. However, the Nasdaq Composite Index lagged behind, dropping 0.6%.
Coronavirus cases in the US are on the rise again, and on Friday the US reported a record high number of people hospitalized with Covid-19. More states are introducing new restrictions to slow the spread of the virus ahead of the winter holiday season.
«In the United States, coronavirus cases and vaccine news remain in the spotlight, along with any developments regarding the supportive stimulus package during a session of Congress. Moderna is expected to report the results of the third phase of trials, and Pfizer / BioNTech will potentially apply for an emergency use authorization for their drug by the end of this week.», – wrote on monday Ray Attrill, Head of Foreign Exchange Strategy, National Australian Bank.