News Home » Asia » Asia stocks bounce back amid positive signals from Beijing on US-China trade

Around the World

Asia stocks bounce back amid positive signals from Beijing on US-China trade

Lisa Micheal 5 Aug 29

Stocks in Asia traded higher on Friday following hints from Beijing that it will not retaliate against the latest round of tariffs from Washington for now.

Mainland Chinese shares advanced in early trade, with the Shanghai composite up 0.23% and the Shenzhen component rising about 0.48%. The Shenzhen composite added 0.16%. Hong Kong's Hang Seng index rose 0.69%.

In Japan, the Nikkei 225 rose 1.35% as shares of index heavyweight and robot maker Fanuc surged 3.28%. The Topix index also added 1.39%.

Similar gains were seen in South Korea, where the Kospi jumped 1.9% as chipmaker SK Hynix saw its stock soar 6.41%.

The Bank of Korea left its benchmark interest rate unchanged on Friday, a decision that was in line with expectations of analysts surveyed by Reuters. The central bank had cut its base rate for the first time in three years in July.

Australia's S&P/ASX 200 traded 1.37% higher.

Overall, the MSCI Asia ex-Japan index gained 1.1%.

Investors were likely boosted by positive signals from Beijing on trade. Gao Feng, a spokesman for China's Ministry of Commerce, said Thursday that Beijing is willing to resolve its trade fight with Washington calmly, indicating that the Chinese are more interested in negotiations than they are on retaliating.

"We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with a calm attitude," Feng said, according to a CNBC translation of his Mandarin-language remarks. He noted that the Chinese and U.S. trade delegations have maintained "effective" communication.

Still, one strategist urged caution for investors.

"We have been telling our clients to somewhat de-risk portfolios a month ago," Vasu Menon, executive director of investment strategy at Singapore's OCBC Bank, told CNBC's "Squawk Box" on Friday.

"In some ways, we are neutral," Menon said. "We're not saying you should get out of the market completely. I think that's not a good idea, fundamentals are not that bad right now. What's dragging the market down is sentiment."

Meanwhile, a closely watched yield curve inversion in U.S. Treasurys remained, with the yield on the 10-year Treasury note below that of the 2-year note's rate. That has raised concerns among some investors as the phenomenon has historically preceded a recession. The yields on the 10-year and 2-year Treasury notes were last at 1.5097% and 1.532%, respectively.

Meanwhile, India is set to release its gross domestic data for the April-June quarter at 8:00 p.m. HK/SIN.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.541, recovering from lows below 98.0 seen earlier in the week.

The Japanese yen traded at 106.47 against the dollar after weakening from levels below 106.2 yesterday, while the Australian dollar changed hands at $0.6715 after seeing an earlier high of $0.6736.

Oil prices were little changed in the morning of Asian trading hours, with international benchmark Brent crude futures edging up 0.15% to $61.17 per barrel and U.S. crude futures losing 0.09% to $56.66 per barrel.

Here's a look at some of the data due today:

  • India: Gross domestic product for April-June quarter at 8:00 p.m. HK/SIN

— Reuters and CNBC's Evelyn Cheng contributed to this report.