The U.S. President Donald Trump and China's chief negotiator, Liu He, signed the Phase 1 deal before a group of corporate executives and reporters at the White House, marking a truce in the dispute over import tariff which has unsettled markets world-wide and slowed economic growth. The pact eases some sanctions on China. In return, Beijing has agreed to step up its purchases of U.S. farm products and other goods.
The text of the deal includes promises by the Chinese to increase their purchases of U.S. agricultural, manufacturing, and energy products, along with purchases of services, by more than $200 billion over the next two years, though it also states that the parties acknowledge that purchases will be made at market prices based on commercial considerations. It also includes commitments by the Chinese to enforce intellectual property theft laws and a bilateral evaluation and dispute resolution arrangement that will encourage the U.S. and China to work jointly to resolves allegations of patent and copyright infringement or intellectual property theft. In exchange, the U.S. slashes tariffs on $120 billion in Chinese goods to 7.5% from 15%.
Most of ASX sectors traded higher, with shares of the information technology sector climbed the most among ASX sectoral peers, helped by strong gains in the 'WAAAX' stocks. Financials, REITs, healthcare, consumer staples, Communications, and consumer discretionary also posted gains. There were some pockets of weakness in utilities, industrials, and energy sectors.
Among individual stocks, Property group Domain Holdings slumped 2.8% after the company was cut to sell by investment bank UBS on valuations grounds after recent share price strength.
CURRENCY NEWS: The Australian dollar, sensitive to shifts in broader risk appetite, advanced against the U.S. dollar. The Australian dollar was at $0.6908, advancing from an earlier low of $0.6899.
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