Asian stock markets surged in early trading Wednesday as traders turned optimistic after trade talks between the U.S. and China were extended for a third day.

President Donald Trump tweeted Tuesday that the mid-level talks in Beijing were “going very well,” and Bloomberg News reported the president was eager to reach a deal in hopes that it would boost the sagging stock market. While the current talks are not expected to resolve trade tensions, officials have said they hope they can serve as a stepladder to more fruitful negotiations.

The talks were “fuelling investor optimism suggesting there might be a light at the end of the trade war tumultuous tunnel,” Stephen Innes, head of Asia Pacific trading at Oanda, said in a Wednesday research note. “Markets already hope the base case scenario to be favorable and talks to continue into Davos later this month.”

Japan’s Nikkei

NIK, +1.23%

  rose 1.4%, as Nintendo

7974, +2.56%

  jumped about 3% and beverage maker Sapporo Holdings

2501, +4.48%

  surged 5%. Nippon Steel

5401, +1.12%

  gained 1.7% despite its South Korean assets being frozen over a World War II-era dispute over compensation for forced laborers.

Hong Kong’s Hang Seng

HSI, +2.49%

  gained 2.4%, as Apple

AAPL, +1.91%

  component makers AAC

2018, +7.12%

  and Sunny Optical

2382, +4.53%

  soared after a report that Apple will cut iPhone production by 10% this quarter. Geely Automotive

0175, +9.39%

  shares rallied after being hammered Tuesday after issuing a disappointing forecast.

In mainland China, the Shanghai Composite

SHCOMP, +1.58%

  advanced 1.5% and the smaller-cap Shenzhen Composite

399106, +1.55%

  rose 1.5%.

South Korea’s Kospi

SEU, +1.86%

  rose nearly 2% behind gains by Samsung

005930, +3.41%

 , LG Electronics

066570, +2.42%

 and steel maker Posco

005490, +4.28%


Australia’s ASX 200

XJO, +0.98%

  gained nearly 1% as energy stocks such as Beach Energy

BPT, +5.17%

  and Woodside Petroleum

WPL, +2.25%

 rallied on rising oil prices. Apple suppliers such as Foxconn

2354, +1.02%

  and Largan Precision

3008, +4.77%

  helped fuel gains for Taiwan’s Taiex

Y9999, +1.79%

 , and Singapore’s benchmark

STI, +1.10%

  rose 1%.

Markets appeared unfazed by a prime-time address Trump gave Tuesday night on border security. “Trump did not declare a national emergency, nor did he hint toward one, which might have been a fear before the speech,” Innes said in his note. Meanwhile, “currencies are holding firm riding the wave sentiment from the positive buzz in U.S.-China trade talks.”

The dollar

USDJPY, +0.14%

  climbed to 108.91 yen from 108.75 yen.

Oil prices also continued to rally. U.S. crude

CLG9, +1.63%

  rose 80 cents to $50.58 per barrel in electronic trading on the New York Mercantile Exchange. It has risen for eight of the past nine days and gained 2.6% to $49.78 per barrel on Tuesday. Brent crude

LCOH9, +1.41%

 , used to price international oils, added 79 cents to $59.51 per barrel. It gained 2.4% to $58.72 a barrel in London.

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