Asian markets rallied Wednesday on much-needed good news on the China-US trade talks, while the pound extended losses as it emerged that Prime Minister Theresa May will face a no-confidence vote. A flurry of positive developments in the tariffs stand-off between the world’s top economies provided some early Christmas cheer on trading floors, fuelling hopes they can avert an all-out trade war. Canada on Tuesday released on bail Meng Wanzhou, chief financial officer at Chinese telecoms giant Huawei, whose arrest last week sparked fury in Beijing and worries about a truce agreed at the G20 by Donald Trump and Xi Jinping this month. Providing some extra support to the news of Meng’s release was an interview in which Trump said he could intervene in the case if it helps seal a trade pact with China, adding: “Whatever’s good for this country, I would do.” China added to market-friendly noise by saying it had agreed to cut tariffs on US autos to 15 percent from 40 percent — wiping out a levy imposed earlier this year in response to US measures. Investors welcomed the headlines — despite news China had detained a former Canadian diplomat who served in Beijing — fuelling a surge in regional markets. Tokyo ended 2.2 percent higher and Shanghai finished up 0.3 percent, while Hong Kong jumped 1.6 percent. Sydney and Seoul each jumped 1.4 percent, while Taipei climbed 1.1 percent, Wellington put on 0.8 percent and Mumbai gained one percent. “Last week, events seemed to conspire to throw the truce into disarray, but the underlying incentives of both sides at the moment are to try to maintain that truce,” said Freya Beamish, chief Asia economist at Pantheon Macroeconomics, told Bloomberg News. “Now we are seeing the possibility that China will come through with reductions of tariffs on US autos, and that’s another good, concrete step.” May no-confidence vote Car firms across Asia tracked gains in their US counterparts as the China tariffs news lifted optimism in the auto market, with Hyundai 5.3 percent higher in Seoul while in Tokyo Toyota was up more than two percent and Mitsubishi added almost three percent. And energy firms were also well up after data showed a massive drop in US stockpiles, indicating a pick-up in demand to offset worries about a global supply glut that has hurt prices. Both main crude contracts were more than one percent higher. But it is not all rosy. The pound, already under pressure, extended losses as it emerged that May will later Wednesday face a vote of no confidence within her Conservative party, with MPs saying they do not believe she can deliver Brexit. The news came after she delayed Tuesday’s vote on her EU divorce agreement knowing she would lose. She has since been touring European capitals to win concessions that would help push the deal through parliament but was told by leaders she will not be able to renegotiate, leaving Britain facing an EU divorce with no deal. “If May loses then we could have a leadership contest beginning in earnest,” said Neil Wilson, chief market analyst at Markets.com. “A tussle for the soul of the Tory party would begin and the spectacle will create further uncertainty for investors.” Key figures Tokyo – Nikkei 225: UP 2.2 percent at 21,602.75 (close) Hong Kong – Hang Seng: UP 1.6 percent at 26,186.71 (close) Shanghai – Composite: UP 0.3 percent at 2,602.15 (close) London – FTSE 100: UP 0.3 percent at 6,828.28 Pound/dollar: DOWN at $1.2485 from $1.2481 at 2150 GMT Euro/dollar: DOWN at $1.1316 from $1.1319 Dollar/yen: UP at 113.50 yen from 113.40 yen Oil – West Texas Intermediate: UP 60 cents at $52.25 per barrel Oil – Brent Crude: UP 71 cents at $60.91 per barrel New York – Dow Jones: DOWN 0.2 percent at 24,370.24 (close) Published in Daily Times, December 13th 2018.