Asian stocks gain despite US-China trade jitters

Big 5

Asian stocks closed higher on Friday despite fresh overnight uncertainties surrounding the ongoing U.S.-China trade negotiations.

The mainland Chinese markets, watched in relation to Beijing’s trade fight with Washington, mostly advanced: The Shanghai composite gained around 0.39 percent to close at about 2,601.72. The Shenzhen component rose 0.29 percent to finish its trading week at approximately 7,595.45 while the Shenzhen composite shed earlier gains to close 0.176 percent lower at about 1,319.97.

Hong Kong’s Hang Seng index gained 1.65 percent to 27,569.19. Shares of Chinese tech juggernaut Tencent bounced 4.12 percent on the back of the company receiving approvals for two new games after months of waiting.

“This is a fourth round of approvals and finally Tencent get two games, I think investors will view this as a good sign that (the) China government is finally approving some games for Tencent,” Jackson Wong, associate director at Huarong International Securities, told CNBC’s “Street Signs ” on Friday.

“Approval for Tencent’s games is very important because unlike other gaming companies, Tencent can utilize or monetize their games very well,” Wong said, in reference to the tech giant’s ability to make money from its games.

The Nikkei 225 in Japan added about 0.97 percent to close at 20,773.56 while the Topix index gained 0.87 percent to finish its trading day at 1,566.10. Shares of conglomerate Softbank Group rose 1.83 percent.

Before the market open, official data showed core consumer prices in Tokyo rose 1.1 percent on-year in January, beating an estimated 0.9 percent increase predicted in a Reuters poll. The inflation measure accounts for oil products but does not include fresh food prices.

South Korea’s Kospi advanced 1.52 percent as shares of industry heavyweight Samsung Electronics and chipmaker SK Hynix extended their gains from Thursday.

In Australia, the ASX 200 rose 0.68 percent to close at 5,905.60, with most sectors seeing gains.

The heavily-weighted financial subindex added about 0.37 percent as shares of the country’s so-called Big Four Banks gained. Australia and New Zealand Banking Group was up 1.04 percent, Commonwealth Bank of Australia rose fractionally, Westpac advanced 0.62 percent and National Australia Bank added 0.65 percent.

“Global financial markets continue to crave certainty on a number of issues and are still finding trends hard to come by as they are pushed and pulled in either direction on an almost daily basis,” analysts at Rakuten Securities Australia said in a morning note.

US-China trade uncertainty

U.S. Commerce Secretary Wilbur Ross said on Thursday that China and the U.S. were not close to striking a trade deal. He told CNBC’s “Squawk Box” that the U.S. is “miles and miles ” from a trade deal with China, adding the two countries have “lots and lots of issues.”

Ross’ comments come as China and the U.S. are racing to strike a trade deal by early-March. If they don’t, additional U.S. tariffs on Chinese goods will come into effect. The two economic powerhouses have been engaged in an ongoing trade fight since last year.

“I think there are fundamental differences here between … the two largest economies in the world,” Jonathan Pain, author of The Pain Report, told CNBC on Thursday.

Recalling U.S. Vice President Mike Pence’s speech at Washington’s Hudson Institute last year, Pain said Pence’s words “basically told me that the United States and China are engaged in a long-term economic war.”

“My personal view is that (U.S. President) Donald Trump actually wants to do a deal, and we also know the Chinese want to do a deal, ” he said. “I think the critical issue is, will Donald Trump be able to tame the trade hawks?”

Chinese Vice Premier Liu He is set for a scheduled visit to the U.S. next week for high level talks.

In overnight market action on Wall Street, the Dow Jones Industrial Average slipped 22.38 points to close at 24,553.24 while the S&P 500 advanced around 0.14 percent to finish its trading day at 2,642.33. The Nasdaq Composite gained 0.68 percent to close at 7,073.46.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.432 after seeing a session low of 96.357 earlier.

The Japanese yen, widely seen as a safe-haven currency, traded at 109.79 against the dollar after touching highs below 109.5 in the previous session. The Australian dollar was at $0.7101.

The British pound  gained 0.37 percent to $1.3112 during Asian hours, as Prime Minister Theresa May attempts to win over U.K. lawmakers with tweaks to her much-maligned Brexit deal before the March 29 deadline. As things stand, the legal default is that the United Kingdom will leave the EU with no agreed deal on trade, laws or travel.

Source: CNBC

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