It's been a fairly dreary day for the S&P/ASX 200 Index (ASX XJO) and ASX shares this Tuesday. The ASX 200 has been in the red all day and ended up finishing 0.07% lower at 7,141.6 points. But it's been a very different story for the Treasury Wine Estates Ltd (ASX: TWE) share price.
Treasury shares have had a cracking day. The company closed at $13.38 a share, up a healthy 1.21%. But earlier today saw Treasury hit even greater heights. The company topped out at $13.70 a share just after market open.
Not only is that a new 52-week high for the Treasury Wine share price, but it is also a post-COVID high. The last time Treasury was trading at these kinds of levels was way back in January 2020.
So what happened today that prompted investors to buck the market's gloomy mood with Treasury and give the company a fresh new 52-week (and multi-year) high?
Image source: Getty Images
What lifted the Treasury Wine share price today?
Well, it could well be the news we have just gotten regarding Australia's relationship with the People's Republic of China.
According to reporting from the ABC, Prime Minister Anthony Albanese is set to meet with Chinese President Xi Jinping today at the G20 meeting in Bali. It would be the first meeting between an Australian and Chinese leader in six years.
So what has this got to do with Treasury Wines? Well, China has imposed trade sanctions on Australian goods as part of the ongoing diplomatic tensions between the two countries. And wine is one of the goods that is being affected.
Treasury has had enormous success with the Chinese markets in the past. But the company has struggled under the new tariffs. These have seen exports of Australian wine to China all but dry up.
Australia has said that for relations to normalise, China must remove the trade sanctions currently in place on Australian goods. So it's likely the markets are interpreting today's meeting as a positive sign that Treasury might soon be able to resume exporting wine to the massive Chinese market.
This could be a good sign for Treasury. But we haven't heard anything concrete from China yet. So we'll have to wait and see if the market's optimism is well placed.
