Stocks extended gains in Europe and US equity futures turned higher after a news report that China and America were moving closer to a trade deal.
They are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal, despite tensions over Hong Kong and Xinjiang, people familiar with the talks said yesterday.
This came after stocks dropped around the world and bonds rallied when President Donald Trump aimed his tariff weapon on economies from South America to Europe and China, denting hopes for a global recovery.
The Hang Seng Index once fell below 26,000 yesterday morning, which was regarded as a key support level, before closing 328 points lower, due to heightened uncertainty over this month's tariff deadline.
Shares of smartphone equipment suppliers went down as Trump's administration launched a fresh attack on telecoms giant and smartphone maker Huawei Technologies.
The US has been warning other countries not to buy telecommunications gear from China's Huawei Technologies and ZTE (0763). A new agency, called the US International Development Finance Corporation, plans to tap some of its US$60 billion budget to help developing countries and businesses purchase equipment from other companies.
The onshore yuan posted 7.0699 per US dollar at market closing time, down 228 pips to hit a one-month low.
Meanwhile, Huawei Technologies is facing a public backlash in China after details of the dismissal and wrongful detention of a former employee went viral.
The treatment of Li Hongyuan, who had worked for the company for 13 years, has become one of the most discussed topics in recent days on China's Twitter-like Weibo platform.
Li was detained by police on an extortion charge for 251 days last year after asking the company for a severance payment when he was laid off.
Huawei said it supported Li's rights to seek a resolution through legal means, but its response has failed to quell public criticism of the firm and the topic was still trending this week.