Asian markets mostly turn around as US-China trade tensions provide a breather
Asian markets mostly recovered in Tuesday afternoon trade as a temporary reprieve in U.S.-China trade tensions provided a breather.
The Nikkei 225 in Japan were largely flat in afternoon trade following an earlier slip, as shares of index heavyweight and robot maker Fanuc recovered to see gains. The Topix index, however, remained in negative territory as it traded down by 0.14%.
Over in South Korea, the Kospi rose 0.88% as shares of Samsung Electronics surged more than 4% following earlier news of Google suspending business activity with Huawei.
Mainland Chinese shares rose by the afternoon, with the Shanghai composite gaining 1.52% and the Shenzhen component adding 2.14%. The Shenzhen composite advanced 1.919%.
The Hang Seng index in Hong Kong rose 0.22%.
“The tension between US and China may ease slightly today after US officials said it would grant 90-day reprieve from penalties to Huawei and its subsidiaries, ” analysts at OCBC Treasury Research wrote in a morning note.
Australia’s ASX 200 was marginally higher.
The Australian dollar last changed hands at $0.6881, off highs above $0.696 seen in the previous week. Australia’s central bank will consider the case for lower interest rates at its June policy meeting, Governor Philip Lowe said on Tuesday.
Earlier, Alphabet’s Google suspended business with Huawei that involves transferring hardware, software and other technical services. The U.S. search giant’s decision followed U.S. President Donald Trump’s administration adding Huawei to a list that required U.S. companies get a license to do business with the Chinese company. Bloomberg News also reported that companies like Intel, Qualcomm and Broadcom will not supply Huawei until further notice.
That came as trade negotiations between Washington and Beijing hit a roadblock, CNBC reported last Friday.
One economist told CNBC on Tuesday that a “threshold has been breached” between the two economic powerhouses.
“Even if the Department of Commerce or anybody outside of White House sort of scales back some of these rhetoric that we’ve heard in the last few days, I don’t think we can ever go back to square one,” Taimur Baig, a managing director and chief economist at DBS Group Research, told CNBC’s “Squawk Box” on Tuesday.
“The iron curtain has been raised,” Baig said. “The breach of trust that the Chinese will never be able to rely 100% on input supplies from the U.S., I think, is permanent.”
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.983 after touching levels above 98 yesterday. The Japanese yen traded at 110.19 against the dollar after seeing highs below 109.2 last week.
Oil prices increased in the afternoon of Asian trading hours. The international benchmark Brent crude futures contract rose 0.32% to $72.20 per barrel, while U.S. crude futures added 0.35% to $63.32 per barrel.
Source: CNBC
