Markets in Asia mostly higher after Wall Street gains on earnings; China slips

FAN Editor

Asian stocks were a mixed picture on Wednesday, with most major markets tracking higher following Wall Street’s gains on strong earnings.

Japan’s Nikkei 225 edged up by 0.41 percent in morning trade, with the sea transport subindex trading higher by 1.72 percent and leading the morning’s gains. Oil and coal products, telecommunications and other financials also saw a rise of more than 1 percent.

South Korean stocks also traded higher, with the Kospi adding 0.2 percent. In Australia, the S&P/ASX 200 was up 0.2 percent, with gains in the heavily weighted financials subindex buoying the broader benchmark.

Elsewhere, Hong Kong’s Hang Seng Index traded sideways, last higher by 0.06 percent. Energy-linked stocks traded higher, extending sharp gains seen on Tuesday, while financials edged lower.

Mainland Chinese shares, meanwhile, pulled back after bouncing in the last session. The Shanghai Composite slipped 0.44 percent and the blue-chip CSI 300 eased by 0.52 percent.

The positive sentiment on Wednesday came despite a backdrop of elevated trade tensions after China last week said it was preparing tariffs, ranging from 5 percent to 25 percent, on some $60 billion in U.S. imports. That came after U.S. President Donald Trump asked U.S. Trade Representative Robert Lighthizer to consider increasing proposed duties on $200 billion of Chinese goods to 25 percent.

Meanwhile, the USTR said on Tuesday that 25 percent U.S. tariffs on $16 billion in Chinese goods will take effect on August 23. An earlier wave of duties on $34 billion in Chinese imports took effect on July 6.

“Seeing is believing, it appears, with respect to the looming threat of a sharp escalation in trade tariff wars,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a note.

Wall Street rose on Tuesday, with the churn of positive earnings overshadowing investor concerns over recently proposed tariffs in the U.S.-China trade dispute. Through Friday, S&P 500 earnings are up 24 percent in the second quarter on a year-over-year basis.

The S&P 500 advanced 0.28 percent to finish at 2,858.45, only 0.5 percent away from its record high of 2,872.87 set in January. Other U.S. indexes had also recorded gains for the day.

Chinese stocks had rebounded on Tuesday after taking a hit in recent sessions, with the Shanghai Composite jumping more than 2 percent on the back of four consecutive sessions of declines.

Gains in Chinese shares in the last session came amid optimism over news of increased government spending on infrastructure. The People’s Bank of China had also met with local banks earlier this week to highlight the importance of avoiding “herd behavior” in the currency markets, according to a Bloomberg report.

Among notable moves in early trade, shares of auto parts maker Hyundai Mobis jumped 4.9 percent while logistics unit Hyundai Glovis dropped 5.15 percent. The moves came as investors reacted to a local media report on restructuring plans. Hyundai Motor shares advanced 2.4 percent.

Elsewhere, shares of China Tower made their debut in Hong Kong, trading mostly flat in the morning. The telcommunications tower company had priced its initial public offering at 1.26 Hong Kong dollars ($0.16) per share and had raised $6.9 billion, making it the largest IPO in the world in two years.

In currencies, the dollar index, which tracks the U.S. dollar against a basket of currencies, drifted lower. The index last stood at 95.122. Against the yen, the dollar was steady at 111.40 at 9:49 a.m. HK/SIN.

Ahead, July trade data from China is expected at 11:00 a.m. HK/SIN.

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