Most Markets Track Wall St Gains, USPS Rethink Provides Boost

Hong Kong: Asian and European markets rose Thursday, tracking gains on Wall Street and following the US Postal Service's U-turn on a ban on parcels from China and Hong Kong, though trade war fears continue to dampen sentiment.

Global equities have been hit by volatility this week after US President Donald trump announced hefty tariffs on China, Canada and Mexico.

But while he reached deals with the United States' neighbours to delay implementation of the measures, there was no such agreement with Beijing.

That was followed Tuesday by news the USPS had scrapped a duty-free exemption for low-value packages from China and Hong Kong -- dealing a heavy blow to Chinese ecommerce giants.

But it rowed back on Wednesday, saying it would "continue accepting all international inbound mail and packages".

The news provided traders with some positive mood music to start the day.

Markets in most of Asia were on the rise, with Hong Kong, Shanghai, Seoul and Sydney up more than one percent.

Tokyo, Singapore and Taipei also rose, while London, Paris and Frankfurt opened on the front foot.

Manila, Mumbai, Bangkok and Jakarta slipped.

However, investors remained on edge about the economic outlook as Trump appeared set to resume the hardball approach to trade and diplomacy seen in his first term.

"Trade War 2.0 is different from the US-China Trade War 1.0 enacted in January 2018 in terms of coverage as this time round it involves major trading partners of the US, on top of the ongoing US-China Tech War," said OANDA senior market analyst Kelvin Wong.

"Hence, countries that have a significant trade surplus with the US will be at risk of being targeted by Trump's trade tariffs policy; the European Union, Japan, South Korea, and ASEAN export-dependent countries such as Vietnam, and Malaysia.

"If trade negotiations are not able to reach the 'middle ground' between the US and the targeted countries, tit-for-tat retaliation measures may escalate."
Ongoing uncertainty about the outlook helped safe-haven gold to a new high above $2,882.

Disappointing earnings from Google-parent Alphabet weighed on the tech sector, which was already feeling the pinch after Chinese startup DeepSeek released a chatbot it said rivalled those of US tech giants but at a fraction of the cost.

Alphabet tanked more than seven percent in New York, while Amazon was off more than two percent.

In currency markets, the yen built on its recent gains against the dollar fuelled by expectations the Bank of Japan will continue hiking interest rates as inflation remains elevated.

After raising borrowing costs last month, officials hinted at more tightening down the line, and on Thursday top policy board member Naoki Tamura said rates should go up to one percent by the end of the year, from their current 0.5 percent.

Among businesses, Nissan rose more than seven percent in Tokyo after reports said it was looking for a new partner amid talk that its flagged tie-up with Honda would not go ahead. Honda fell four percent.

A source told AFP on Thursday that Nissan's board was in favour of abandoning the merger talks.

On Wednesday, Nissan dropped 4.8 percent and Honda soared more than eight percent.

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