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Taiwanese President Lai Ching-te said Wednesday his government will propose $40 billion in additional defence spending over eight years, as the democratic island seeks to deter a potential Chinese invasion.Taiwan has ramped up defence spending in the past decade as Chinese military pressure intensified, but US President Donald Trump’s administration has pushed the island to do more to protect itself.Lai said Wednesday the military aimed to have a “high level” of joint combat readiness against China by 2027 — which US officials have previously cited as a possible timeline for a Chinese attack on the island.”The ultimate goal is to establish defence capabilities that can permanently safeguard democratic Taiwan,” Lai said at a news conference in Taipei after announcing the $40 billion spending plan in an opinion piece in the Washington Post. Communist China has never ruled Taiwan, but Beijing claims the island is part of its territory and has threatened to use force to annex it.Lai’s announcement came as Tokyo and Beijing were locked in a weeks-long diplomatic spat that followed remarks by Japanese Prime Minister Sanae Takaichi suggesting Japan could intervene militarily in any attack on Taiwan.The United States’ top envoy in Taiwan said he “welcomes” the government’s spending plan and urged the island’s rival political parties to “find common ground” on boosting its defences.Lai said the extra spending would go towards new arms purchases from the United States as well enhancing Taiwan’s ability to wage asymmetrical warfare.But he said the spending was not tied to Taiwan’s ongoing tariff negotiations with the United States, insisting the main goal was to “demonstrate Taiwan’s determination to defend” itself. “We aim to bolster deterrence by inserting greater costs and uncertainties into Beijing’s decision-making on the use of force,” Lai said in the Washington Post.His comments also follow US approval earlier this month for $330 million-worth of parts and components in Washington’s first military sale to Taiwan since Trump’s return to the White House.- ‘Safeguarding Taiwan’s future’ -Lai, who leads the Democratic Progressive Party (DPP), previously laid out plans to boost annual defence spending to more than three percent of GDP next year and five percent by 2030, following US pressure to spend more on protecting itself against a potential Chinese attack.The government has proposed NT$949.5 billion ($30 billion), or 3.32 percent of GDP, for defence spending next year.The additional spending plan announced Wednesday would be spread out over eight years and exceeds the $32 billion previously revealed to AFP by a senior DPP lawmaker.In the opinion piece, Lai said he would accelerate the development of the so-called “T-Dome” — a multi-layered air defence system — which will “bring us closer to the vision of an unassailable Taiwan, safeguarded by innovation and technology”.”My message here is clear: Taiwan’s dedication to peace and stability is unwavering,” Lai said.”No country will be more determined in safeguarding Taiwan’s future than our own.”But the government may struggle to get the proposed spending approved by parliament, where the main opposition Kuomintang party, which advocates closer ties with China, controls the purse strings with the help of the Taiwan People’s Party.Recently elected Kuomintang chairperson Cheng Li-wun has previously opposed Lai’s defence spending plans, saying Taiwan “doesn’t have that much money”.

China is among parties interested in bidding to build two new ports on the Panama Canal, its administrator said Tuesday, despite US talk of retaking control of the vital trade route.US President Donald Trump made the threat earlier this year, alleging that China controls the strategic waterway because Hong Kong-based CK Hutchison Holdings operates existing ports at either end — Cristobal on the Atlantic, and Balboa on the Pacific.The firm agreed in March to transfer control of both ports to a conglomerate led by US-based BlackRock, but the deal — viewed with suspicion by China — has not been finalized.  The Central American country is hoping to attract $8.5 billion in investment over the next decade to expand port capacity, and to build a gas pipeline and a new reservoir, among other projects.In addition to new ports, the project envisions the construction of a gas pipeline and a new reservoir.”We have to be open to participation of all interested parties,” and solicit “the broadest possible competition,” canal administrator Ricaurte Vasquez told journalists. He said all parties would bid on an equal footing.He declined to speculate about a possible increase in tensions with the United States if the projects were awarded to Chinese firms in the future.The Panama Canal Authority, which has begun meeting with interested parties ahead of the bidding process, plans to award contracts for the two terminals in late 2026 and begin operations in 2029.Hong Kong’s Cosco Shipping Ports and Orient Overseas Container Line (OOCL) are among international players that have expressed interest — along with Singapore’s PSA International, Taiwan’s Evergreen, German Hapag Lloyd, Denmark’s Maersk and France’s CMA Terminals.Panama’s five main ports are all located near the canal and are operated by concessionaires from the United States, Hong Kong, Taiwan and Singapore.The 80-kilometer canal is used mainly by the United States and China and carries five percent of the world’s maritime trade.The United States built and operated the Panama Canal for a century before handing control to Panama on the last day of 1999.

Asia extended a global equities rally Wednesday after another round of tepid US data reinforced expectations that the Federal Reserve will cut interest rates again next month.A report that US President Donald Trump’s top economic aide was the frontrunner to be the central bank’s next boss added to the risk-on mood as investors rediscovered their mojo after a recent stutter.Bets that officials will lower borrowing costs at their December meeting have surged this week after a number of key members of the policy board said they backed a third successive cut as fears about the labour market overshadowed still-high inflation.And a fresh batch of reports on the world’s top economy  — some delayed by the government shutdown — provided fresh ammunition to those calling for more easing.Payroll firm ADP said the four weeks to November 8 saw private employers shed an average 13,500 jobs per week, while official figures showed retail sales rose slower in September than August and less than expected. Meanwhile, the Conference Board’s consumer confidence index dropped to its lowest level in seven months, with shoppers expressing greater worry about labour market conditions and the outlook for household incomes.Analysts said the reading was particularly a concern ahead of the holiday spending period.The Labor Department also said wholesale inflation picked up in September but in line with forecasts.However, the rise was driven by a big jump in goods prices, highlighting the steeper costs that businesses face.”The shutdown backlog released an avalanche of extremely stale prints: ADP soft, retail sales weaker, Core PPI tame, Richmond Fed grim, consumer confidence dismal,” wrote Stephen Innes at SPI Asset Management.”None of it is current, none of it is forward-looking. But in a market starving for macro inputs, even freezer-burnt data tastes dovish. Goldman’s economists shaved third-quarter GDP tracking to 3.7 percent, reinforcing the narrative that growth is cooling right into the December (policy board) window.”The chances of a more dovish Fed were also given a boost after Bloomberg reported that Kevin Hassett, director of the White House National Economic Council, was considered the leading candidate to take the lead at the Fed when Jerome Powell’s term ends next year. Hassett is a close ally of the president and Bloomberg said he was seen as someone who would back rate-cut calls by Trump, who has regularly slammed Powell for not taking such action early enough. “Hassett is viewed as closely aligned with President Trump’s preference for lower interest rates, and his appointment would likely reinforce the administration’s push for easier policy,” said National Australia Bank’s Rodrigo Catril.Wall Street’s three main indexes enjoyed a third day of healthy gains, and Asia again followed suit.Tokyo and Seoul gained around two percent, while Hong Kong, Shanghai, Sydney, Singapore, Taipei and Wellington also chalked up healthy advances.The gains come after a pullback on trading floors for much of November owing to worries about lofty valuations, particularly among tech firms, with some questioning the wisdom of the vast sums of cash invested in the artificial intelligence sector.In corporate news, Chinese ecommerce titan Alibaba dropped more than one percent after reporting a fall in profit linked to consumer subsidies and the building of data centres to deal with its AI ambitions.- Key figures at around 0230 GMT -Tokyo – Nikkei 225: UP 1.9 percent at 49,605.57 (break)Hong Kong – Hang Seng Index: UP 0.6 percent at 26,054.70Shanghai – Composite: UP 0.2 percent at 3,876.05Euro/dollar: UP at $1.1583 from $1.1570 on TuesdayPound/dollar: UP at $1.3191 from $1.3165Dollar/yen: DOWN at 155.82 yen from 155.97 yenEuro/pound: DOWN at 87.81 pence from 87.86 penceWest Texas Intermediate: UP 0.2 percent at $58.06 per barrelBrent North Sea Crude: UP 0.2 percent at $62.62 per barrelNew York – Dow: UP 1.4 percent at 47,112.45 (close) London – FTSE 100: UP 0.8 percent at 9,609.53 (close)

China’s stranglehold on the rare earths industry — from natural reserves and mining through processing and innovation — is the result of a decades-long drive, now giving Beijing crucial leverage in its trade war with the United States.The 17 key elements will play a vital role in the global economy in coming years, as analysts warn that plans to secure alternative supply chains by Western governments could take years to bear fruit.Rare earths are crucial for the defence sector — used in fighter jets, missile guidance systems and radar technology — while also having a range of uses in everyday products including smartphones, medical equipment and automobiles.Visited this month by AFP, the southeastern mining region of Ganzhou — which specialises in “heavy” rare earths including yttrium and terbium — was a hive of activity.Media access to the secretive industry is rarely granted in China, but despite near-constant surveillance by unidentified minders, AFP journalists saw dozens of trucks driving in and out of one rare earths mine, in addition to several bustling processing facilities.Sprawling new headquarters are being built in Ganzhou for China Rare Earth Group, one of the country’s two largest state-owned companies in the industry following years of consolidation directed by Beijing.Challenges this year have “paved the way for more countries to look into expanding rare earth metal production and processing”, Heron Lim, economics lecturer at ESSEC Business School, told AFP.”This investment could pay longer-term dividends,” he said.- Trade war -Sweeping export restrictions China imposed on the sector in early October sent shockwaves across global manufacturing sectors.The curbs raised alarm bells in Washington, which has been engaged in a renewed trade war with Beijing since President Donald Trump began his second term.At a high-stakes meeting in South Korea late last month, Trump and Chinese counterpart Xi Jinping agreed to a one-year truce in a blistering tariff war between the world’s top two economies.The deal — which guarantees supply of rare earths and other critical minerals, at least temporarily — effectively neutralised the most punishing US measures and was widely seen as a victory for Beijing.”Rare earths are likely to remain at the centre of future Sino-US economic negotiations despite the tentative agreements thus far,” Heron Lim told AFP.”China has demonstrated its willingness to use more trade levers to keep the United States at the negotiating table,” he said.”The turbulence has created a challenging environment for producers that rely on various rare earth metals, as near-term supply is uncertain.”Washington and its allies are now racing to develop alternative mining and processing chains, but experts warn that process will take years.- Supremacy ceded -During the Cold War, the United States led the way in developing abilities to extract and process rare earths, with the Mountain Pass mine in California providing the bulk of global supplies.But as tensions with Moscow eased and the substantial environmental toll wrought by the rare earth industry gained prominence, the United States gradually offshored capacity in the 1980s and 1990s.Now, China controls most of global rare earths mining — around two thirds, by most estimates.It is already home to the world’s largest natural reserves of the elements of any country, according to geological surveys.And it has a near total monopoly on separation and refining, with analysis this year showing a share of around nine tenths of all global processing.Furthermore, a commanding lead in patents and strict export controls on processing technology solidify efforts by Beijing to prevent know-how from leaving the country.”The United States and the European Union are heavily reliant on imports of rare earth elements, underscoring significant risks to critical industries,” said Amelia Haines, commodities analyst at BMI, at a seminar this month.”This sustained risk is likely to catalyse a faster, broader pivot towards rare earth security,” she said.- Chasing alternatives -US defence authorities have in recent years directed large sums towards shoring up domestic production — part of efforts to achieve a “mine-to-magnet” supply chain by 2027.Washington has also been working with allies to develop extraction and processing alternatives to China.Trump signed a rare earths deal last month promising $8.5 billion in critical minerals projects with Prime Minister Anthony Albanese of Australia — its vast territory home to extensive rare earth resources.The US president also signed cooperation deals covering the critical minerals sector last month with Japan, Malaysia and Thailand.Despite the flurry of activity and headlines this year, Washington has been aware of its rare earths problem for years.In 2010, a maritime territorial dispute with Tokyo prompted Beijing to suspend shipments of the minerals to Japan — the first major incident highlighting geopolitical ramifications of China’s control over the sector.The episode sparked calls by the administration of then-president Barack Obama to shore up US domestic resilience in the strategic field.But 15 years later, China remains the chief rare earths power.

Wall Street stocks shrugged off early weakness Tuesday and joined European bourses in rising on continued hopes the Federal Reserve will cut interest rates next month.The prospect for further interest rate easing helped offset lingering worries about whether artificial intelligence equities are overvalued while a trove of mixed US economic reports included some worrying signs that analysts said likely strengthened the Fed’s case for cutting rates.The market is rallying as “the chances of a December cut (…) have moved higher,” said Angelo Kourkafas, adding that softness in some of the reports “helps reinforce the fact that the Fed will be moving” towards a rate cut.All three US indices advanced, led by the blue-chip Dow index, which climbed 1.4 percent.Earlier, London, Paris and Frankfurt all pushed higher.US data releases pointed to slower than expected growth of retail sales in September, while producer prices increased in line with expectations.The Conference Board’s consumer confidence index dropped to its lowest level in seven months, with shoppers expressing greater worry about labor market conditions and the outlook for household incomes.”The economy can’t afford to lose the consumer, particularly ahead of the all-important holiday season,” said Bret Kenwell, at the eToro trading platform. “It’s something to watch moving forward.”Traders now see about a 90 percent chance of a rate reduction, against around 35 percent only last week.Most large US tech companies advanced Tuesday. An exception was Nvidia, which finished down 2.6 percent following a report in The Information that Facebook parent Meta could use Google chips in its data centers.Big-box retailer Best Buy surged 5.3 percent after reporting better-than-expected results as CEO Corie Barry pointed to a confluence in which “customers need to upgrade or replace their consumer electronics and new products and innovation are coming to market.”Oil prices retreated amid reports that a deal to end the war in Ukraine may be close, which, if confirmed, would allow Russia to export vastly more oil.- Key figures at around 2120 GMT -New York – Dow: UP 1.4 percent at 47,112.45 (close) New York – S&P 500: UP 0.9 percent at 6,765.88 (close)Nasdaq – UP 0.7 percent 23,025.59 (close)London – FTSE 100: UP 0.8 percent at 9,609.53 (close)Paris – CAC 40: UP 0.8 percent at 8,025.80 (close)Frankfurt – DAX: UP 1.0 percent at 23,464.63 (close)Tokyo – Nikkei 225: UP 0.1 percent at 48,659.52 (close)Hong Kong – Hang Seng Index: UP 0.7 percent at 25,894.55 (close)Shanghai – Composite: UP 0.9 percent at 3,870.02 (close)Euro/dollar: UP at $1.1570 from $1.1521 on MondayPound/dollar: UP at $1.3165 from $1.3105Dollar/yen: DOWN at 155.97  yen from 156.89 yenEuro/pound: DOWN at 87.86 pence from 87.91 penceBrent North Sea Crude: DOWN 1.4 percent at $62.48 per barrelWest Texas Intermediate: DOWN 1.5 percent at $57.95 per barrelburs-jmb

Stock markets on both sides of the Atlantic posted moderate gains Tuesday on Fed rate cut speculation, but tech sector weakness undermined the bullish sentiment, dealers said.Shares of artificial intelligence star Nvidia tumbled on Wall Street, following a report in The Information that Facebook parent Meta could use Google chips in its data censors. Investors in tech stocks have been trying to move past fears that AI enthusiasm may have created a bubble that is waiting to burst.”AI remains one of the most powerful forces reshaping markets, but the tone is changing,” wrote Saxo Markets’ Charu Chanana.”Strong earnings from leading chipmakers (led by Nvidia)… reassure investors that demand is real, yet the sharp swings in market reaction show that enthusiasm now sits alongside questions around sustainability, profitability, and execution.”Expectations that the US Federal Reserve will cut interest rates next month added support to equities, while weighing on the dollar.Lower interest rates typically weaken a currency, especially when there are lingering inflationary pressures.Fed governor Christopher Waller said Monday inflation was not his main worry and that he was “advocating for a rate cut at the next meeting”.US data pointing to labour market softness and weaker-than-expected retail sales numbers further fuelled rate cut expectations, especially as the figures raised concerns about US consumer confidence, said Bret Kenwell, at the eToro trading platform. “The economy can’t afford to lose the consumer, particularly ahead of the all-important holiday season,” he said. “It’s something to watch moving forward.”Traders now see about a 90 percent chance of a rate reduction, against around 35 percent only last week — but not everyone saw this as a good thing.”The last time we saw Fed rate expectations change that fast — September 2024 — the last-minute 50 bp cut turned out to be a mistake, and the Fed had to pause for a year before moving again,” said Ipek Ozkardeskaya, an analyst at Swissquote, an investment firm.”Did it prevent the bulls from buying? Not really,” she added.Oil prices slumped amid reports that a deal to end the war in Ukraine may be close which, if confirmed, would allow Russia to export vastly more oil.- Key figures at around 1535 GMT -New York – Dow: UP 0.7 percent at 46,791.88 pointsNasdaq – DOWN 0.3 percent 22,811.00London – FTSE 100: UP 0.8 percent at 9,609.53 (close)Paris – CAC 40: UP 0.8 percent at 8,025.80 (close)Frankfurt – DAX: UP 1.0 percent at 23,464.63 (close)Tokyo – Nikkei 225: UP 0.1 percent at 48,659.52 (close)Hong Kong – Hang Seng Index: UP 0.7 percent at 25,894.55 (close)Shanghai – Composite: UP 0.9 percent at 3,870.02 (close)Euro/dollar: UP at $1.1570 from $1.1523 on MondayPound/dollar: UP at $1.3186 from $1.3110Dollar/yen: DOWN at 156.10 yen from 156.81 yenEuro/pound: DOWN at 87.76 pence from 87.91 penceBrent North Sea Crude: DOWN 2.5 percent at $61.16 per barrelWest Texas Intermediate: DOWN 2.7 percent at $57.27 per barrelburs-jh/cw

The European Union must ramp up efforts to break its dependence on China for rare earths faced with export curbs that amount to a “racket” by Beijing, the bloc’s industry chief Stephane Sejourne said Tuesday.China, the world’s top producer of rare earths, in October announced new controls on the export of the elements, used to make magnets crucial to the auto, electronics and defence industries.The move rattled markets and snarled supply chains until China later said it would suspend its curbs for one year.Already since April, Beijing has required licences for certain exports of the materials, hitting global manufacturing sectors.Sejourne has been preparing a plan to end the 27-nation bloc’s dependence on China that will be announced on December 3.In a speech to the European Parliament Tuesday, he pointed to export licences “issued in dribs and drabs” and said deliveries were falling behind schedule.”These licences are granted in exchange for information that often — and this is worrying — include trade secrets. These requirements look like a racket if we consider all the demands made on our manufacturers to obtain licences,” Sejourne said.”It is high time for Europe to step up its game. To redouble its efforts to reduce our dependencies on China,” Sejourne told EU lawmakers.The October controls were a major sticking point in trade talks between Beijing and Washington, and Sejourne said that Europe was both a “collateral victim” of their trade tensions, and “directly targeted” itself.In next week’s package of measures, Sejourne said the EU executive would push for the bloc to speed up the joint purchasing of critical raw materials including rare earths, accelerate production and recycling in Europe, work with reliable partners and conclude new partnerships.The EU executive will also propose next week the creation of a European Centre for Critical Raw Materials that will be the bloc’s supply hub modelled on Japan’s state-run Japan Oil, Gas and Metals National Corporation, Sejourne said.”It should also allow us to assess needs, to buy together and store critical minerals in Europe,” he added.

Kyrgyzstan said Tuesday it had arrested the Chinese CEO of a gold mining firm accused of causing “large-scale” environmental damage, amid growing public scrutiny over Beijing’s influence in the Central Asian country.China has poured hundreds of millions of dollars of investment into neighbouring Kyrgyzstan in recent years, financing huge infrastructure projects and expanding its mining activities in a bid to secure critical minerals.China and Kyrgyzstan say the partnership has been beneficial to both sides, but some in the local population have complained the influx of Chinese workers and companies has driven up prices and pollution.The CEO of Kemin Resource Group, who was arrested last Thursday, managed a mine accused of damaging thousands of square metres of land and providing false information to authorities, Kyrgyzstan’s security service said in a statement.”The activities of the mine … caused particularly large-scale damage,” it said.Local residents had complained that exploration work had contaminated the water supply, threatened tourism and risked hastening the melting of glaciers, Kyrgyz media reported earlier this year.Beijing did not immediately comment.The arrest comes less than two weeks after a brawl broke out between Chinese and Kyrgyz construction workers in the country’s north, fuelling anti-Chinese sentiment on social media.Rich in natural resources, Central Asia’s five republics have courted interest from major powers including China, the European Union and the United States since becoming independent from the Soviet Union in 1991.

European and Asian stock markets mostly rose Tuesday following a tech-led rally on Wall Street that soothed fears of an AI bubble.Expectations that the US Federal Reserve will cut interest rates next month added further support to equities but weighed on the dollar.Oil prices were downbeat amid reports US Army Secretary Dan Driscoll is meeting with a Russian delegation in Abu Dhabi on Tuesday, days after talks with Ukraine in Geneva aimed at ending the conflict, which would relieve pressure on Russia’s energy exports.London led the way among Europe’s top stock markets, gaining 0.3 percent nearing midday and on the eve of the UK government’s annual budget.Tokyo edged higher as trading resumed after a long holiday weekend in Japan, while Chinese indices won solid gains.Investors were waiting to see whether “the recent recovery in US stocks is a short-term reprieve or the beginning of another leg higher in the bull market”, noted Joshua Mahony, chief market analyst at traders Scope Markets.Optimism appeared to be returning to trading floors on increased chances of a December rate cut from the Fed, which would be the third in a row. Fed governor Christopher Waller told Fox Business on Monday that inflation was not his main worry and that his “concern is mainly the labour market, in terms of our dual mandate” to support jobs and keep a cap on prices.”So I’m advocating for a rate cut at the next meeting,” he added.His comments add to similar sentiment expressed by San Francisco Fed president Mary Daly and New York Fed boss John Williams.Traders now see about a 90 percent chance of a reduction, having been around 35 percent only last week.The prospect of lower borrowing rates pushed Wall Street sharply higher Monday, with the S&P 500 closing up 1.6 percent.The Nasdaq charged 2.7 percent higher thanks to a surge in heavyweights Alphabet, Amazon and Meta.Tech firms have enjoyed a sudden revival after suffering sharp sell-offs in recent weeks on concerns that the AI-led splurge this year may have pushed valuations too far.While there is debate about whether the advance has more legs, observers say the outlook is more nuanced.”AI remains one of the most powerful forces reshaping markets, but the tone is changing,” wrote Saxo Markets’ Charu Chanana.”Strong earnings from leading chipmakers (led by Nvidia)… reassure investors that demand is real, yet the sharp swings in market reaction show that enthusiasm now sits alongside questions around sustainability, profitability, and execution.Sentiment won an additional lift from US President Donald Trump, who praised “extremely strong” US-China relations following a call with counterpart Xi Jinping.Trump plans to visit China in April, followed by a return trip from Xi later next year.- Key figures at around 1130 GMT -London – FTSE 100: UP 0.3 percent at 9,560.02 pointsParis – CAC 40: UP 0.2 percent at 7,972.78Frankfurt – DAX: UP 0.1 percent at 23,255.03Tokyo – Nikkei 225: UP 0.1 percent at 48,659.52 (close)Hong Kong – Hang Seng Index: UP 0.7 percent at 25,894.55 (close)Shanghai – Composite: UP 0.9 percent at 3,870.02 (close)New York – Dow: UP 0.4 percent at 46,448.27 (close)Euro/dollar: UP at $1.1533 from $1.1523 on MondayPound/dollar: UP at $1.3118 from $1.3110Dollar/yen: DOWN at 156.45 yen from 156.81 yenEuro/pound: UP at 87.93 pence from 87.91 penceBrent North Sea Crude: DOWN 0.5 percent at $62.43 per barrelWest Texas Intermediate: DOWN 0.5 percent at $58.57 per barrel

Investors on Tuesday welcomed more dovish comments from Federal Reserve officials reinforcing hopes it will cut interest rates next month, while a tech-led rally on Wall Street soothed recent AI bubble worries.After a swoon in recent weeks, optimism appeared to be returning to trading floors as the chances of a third successive reduction in US borrowing costs increases as a weakening labour market offsets stubbornly high inflation. Fed governor Christopher Waller told Fox Business on Monday that inflation was not his main worry and that his “concern is mainly the labour market, in terms of our dual mandate” of the Fed to support jobs and keep a cap on prices.”So I’m advocating for a rate cut at the next meeting.”His comments echoed those of San Francisco Fed president Mary Daly, who told the Wall Street Journal: “On the labour market, I don’t feel as confident we can get ahead of it.”She added that the risk of a bust higher in inflation was a lower risk as the impact of US President Donald Trump’s tariffs had been less than expected.New York Fed boss John Williams said Friday that he still sees “room for a further adjustment” at the bank’s December 9-10 policy meeting.Analysts pointed out that the lack of pushback from the Fed on the remarks suggested boss Jerome Powell backed them and was preparing for another cut.Traders now see about a 90 percent chance of a reduction, having been around 35 percent last week.The prospect of lower borrowing rates pushed Wall Street sharply higher for a second successive day Monday, with the S&P 500 up around 1.6 percent.The Nasdaq charged 2.7 percent higher thanks to a surge in market heavyweights including Alphabet, Meta and Amazon.And the gains continued in Asia, which built on Monday’s strong performance.Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Taipei, Mumbai, Bangkok and Jakarta all advanced, though there were pullbacks in Manila, Singapore and Wellington.London, Paris and Frankfurt opened higher.Tech firms have enjoyed a revival after suffering a period of selling in recent weeks, owing to concerns that the AI-led splurge this year may have pushed valuations too far and the huge investments made in the sector could take time to come to fruition.While there is debate about whether the advance has more legs, observers say the outlook is more nuanced.”AI remains one of the most powerful forces reshaping markets, but the tone is changing,” wrote Saxo Markets’ Charu Chanana.”Strong earnings from leading chipmakers… reassure investors that demand is real, yet the sharp swings in market reaction show that enthusiasm now sits alongside questions around sustainability, profitability, and execution.”The broad ‘everything goes up’ phase of the AI trade is fading. What replaces it is a more nuanced market: one that rewards fundamentals over narratives.”She added that investors now had to “separate the durable players from those caught up in the momentum”.Sentiment was also given a lift after Trump praised “extremely strong” US-China relations following a call with his Chinese counterpart Xi Jinping.He also said he will visit China in April and that Xi will make a trip to Washington later in 2026.However, he made no mention of the fact that they had spoken about the ever-sensitive issue of Taiwan. China’s foreign ministry said Trump had told Xi the United States “understands how important the Taiwan question is to China”.The call came after the pair met in late October for the first time since 2019, engaging in closely watched trade talks between the world’s top two economies.- Key figures at around 0815 GMT -Tokyo – Nikkei 225: UP 0.1 percent at 48,659.52 (close)Hong Kong – Hang Seng Index: UP 0.7 percent at 25,894.55 (close)Shanghai – Composite: UP 0.9 percent at 3,870.02 (close)London – FTSE 100: UP 0.1 percent at 9,542.56 Euro/dollar: UP at $1.1526 from $1.1523 on MondayPound/dollar: UP at $1.3125 from $1.3110Dollar/yen: DOWN at 156.61 yen from 156.81 yenEuro/pound: DOWN at 87.82 pence from 87.91 penceWest Texas Intermediate: DOWN 0.6 percent at $58.50 per barrelBrent North Sea Crude: DOWN 0.6 percent at $62.99 per barrelNew York – Dow: UP 0.4 percent at 46,448.27 (close)