Pakistan, India Escalations- Asia Market Wrap

Equity-index futures rose as plans for trade negotiations between China and the US spurred optimism tensions between the world’s two largest economies will ease.

Futures contracts for the S&P 500 and the Nasdaq 100 both climbed 0.6% on news US and Chinese officials will meet this week in Switzerland. European stocks were also poised to rise after Asian stocks inched up 0.1% – they pared earlier gains of as much as 0.7% – as China reduced its policy rate to boost the economy. A gauge of file dollar strengthened, snapping three days of declines, while gold fell 1.4%

The Indian rupee weakened 0.2% and stocks in Mumbai fell 0.1% as investors looked beyond the India-Pakistan military strikes and focused on trade talks. On Tuesday, India and the UK agreed to a landmark trade deal. Pakistan’s equity benchmark slumped more than 6%.

The US-China meeting will be the first confirmed trade talks between the countries since President Donald Trump declared sweeping tariffs last month, led by punishing levies on China. While the thawing of trade tensions provided the markets with a temporary reprieve ahead of Wednesday’s rate decision by the Federal Reserve, further rallies will depend on whether the discussions produce significant outcomes.