Asian markets rose Wednesday afternoon as the U.S. announced a delay in the implementation of tariffs on some Chinese goods.
Shares in mainland China rose by the afternoon, with the Shanghai composite gaining 0.78 percent and the Shenzhen component jumping 1.24 percent. The Shenzhen composite also advanced 1.202 percent.
The United States Trade Representative announced Tuesday certain products including clothing and cellphones are being removed from the tariff list based on “health, safety, national security and other factors” and will not face additional tariffs of ten percent. Other tariffs will be delayed to Dec. 15 from September 1 for certain goods, it said.
“A cynical view then is that the delay is purely for political timing rather than a more substantive change in the US’ approach to the US-China relationship,” Tapas Strickland, an economist at National Australia Bank, wrote in a note.
“Overall a high degree of (skepticism) should remain and an imminent deal is unlikely given Trump has foreshadowed he is going to be campaigning hard on the issue in the 2020 election,” Strickland said.
Meanwhile, the Hang Seng index in Hong Kong rose 0.54 percent. Tensions in Hong Kong remained high after the city’s airport saw disruptions for a second day on Tuesday as a result of protests.
“In the near term, Hong Kong police might take tougher action and China might be looking to resolve this issue one way or the other way, which is going to be negative for the markets,” Suresh Tantia, senior investment strategist at the Credit Suisse APAC CIO office, told CNBC’s “Street Signs” on Wednesday.
“We are advising client(s) to cut their exposure towards Hong Kong equity markets and move towards more South Asia markets like Indonesia,” Tantia said.
Elsewhere, Japan’s Nikkei 225 rose 0.92 percent in afternoon trade, while the Topix index also advanced 0.79 percent .
Over in South Korea, the Kospi gained 0.74 percent, Australia’s S&P/ASX 200 also rose fractionally.
Overall, the MSCI Asia ex-Japan index added 0.87 percent.
The People’s Bank of China set its official midpoint reference rate for the yuan at 7.0312 per dollar on Wednesday, stronger than analyst expectations and the fifth consecutive session where the central bank fixed the midpoint at a level weaker than the psychologically important 7-yuan-per-dollar mark.
The onshore yuan last traded at 7.0209 against the greenback, while its offshore counterpart changed hands at 7.0353 per dollar.
The yuan has been closely watched by investors since it weakened past 7 per dollar last week, leading the U.S. Treasury Department to label China a currency manipulator.
Apple suppliers mostly jump
Shares of Apple suppliers in Asia mostly jumped on Wednesday afternoon, after the Cupertino-based tech giant saw its stock surge more than four percent on Tuesday after U.S. President Donald Trump’s administration announced tariffs on electronics would be delayed till December.
In Japan, Taiyo Yuden jumped 6.37 percent and Murata Manufacturing surged 3.22 percent. Japan Display, on the other hand, dropped 4.62 percent. Last week, the embattled display maker announced its 10th straight quarterly loss.
Over in South Korea, LG Display added 1.19 percent. Hong Kong’s Sunny Optical skyrocketed 12.15 percent , while Taiwan’s Pegatron added 1.19 percent and Taiwan Semiconductor Manufacturing Company jumped 2.03 percent.
China industrial output disappoints
Data from the National Bureau of Statistics in China on Wednesday showed the country’s industrial output in July rising at its slowest in 17 years.
Industrial output rose 4.8 percent in July as compared to a year earlier, official data showed — its slowest since February 2002. That was much lower than expectations of a 5.8 percent growth from a year earlier by analysts in a Reuters poll.
Retail sales growth was also weaker than expected, rising 7.6 percent in July from a year earlier. Analysts surveyed by Reuters had expected growth of 8.6 percent.
Dollar holds on to gains
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.805 after surging from levels below 97.5 yesterday.
The Japanese yen, often seen as a safe-haven currency, traded at 106.41 against the dollar after weakening sharply from levels below 105.5 in the previous session. The Australian dollar changed hands at $0.6791 after jumping from levels below $0.676 yesterday.
Oil prices declined in the afternoon of Asian trading hours, with international benchmark Brent crude futures sliding 1.06 percent to $60.65 per barrel. U.S. crude futures fell 1.3 percent to $56.36 per barrel.