By Marketwatch and Associated Press
Asian markets rose in early trading Friday on news that Chinese officials have more interest in renewed trade negotiations with the U.S. than retaliation for new tariffs.
China’s Commerce Ministry was quoted Thursday as saying China would not immediately respond to the Trump administration’s latest tariff hikes — some of which are scheduled to take effect Sept. 1. The spokesman added that the two sides had been discussing details of new face-to-face trade talks scheduled for next month.
That boosted stocks on Wall Street on Thursday, with the major indexes rising more than 1.2% each.
Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +1.40% gained 1.2% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.67% rose 0.5%. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.10% edged up 0.2% while the Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 +0.35% advanced 0.1%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.26% gained 1.8% as the country’s central bank kept its benchmark interest rate unchanged, as analysts expected, while benchmark indexes in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 +0.95% , Singapore /zigman2/quotes/210597985/delayed SG:STI +0.50% , Malaysia /zigman2/quotes/210598052/delayed MY:FBMKLCI -0.17% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.31% posted gains. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +2.14% rose 1.3%.
Among individual stocks, Japan Steel Works /zigman2/quotes/207991538/delayed JP:5631 +1.87% surged in Tokyo trading, while Rakuten /zigman2/quotes/201861450/delayed JP:4755 +4.00% , robotics maker Fanuc /zigman2/quotes/202054799/delayed JP:6954 +1.55% and SoftBank /zigman2/quotes/207303954/delayed JP:9984 -1.63% rose as well. In Hong Kong, oil producer CNOOC /zigman2/quotes/203421416/delayed HK:883 +2.21% and Apple supplier Sunny Optical /zigman2/quotes/206687505/delayed HK:2382 -0.47% gained, along with Tencent /zigman2/quotes/204605823/delayed HK:700 +0.93% and AIA Group /zigman2/quotes/203565558/delayed HK:1299 +1.59% . Samsung /zigman2/quotes/209800866/delayed KR:005930 +1.41% , LG Electronics /zigman2/quotes/209966407/delayed KR:066570 +1.22% and SK Hynix /zigman2/quotes/206420319/delayed KR:000660 +0.24% shot up in South Korea, while Foxconn /zigman2/quotes/204111604/delayed TW:2354 0.00% and Largan Precision /zigman2/quotes/210444196/delayed TW:3008 +1.18% rose in Taiwan. In Australia, Beach Energy /zigman2/quotes/200513631/delayed AU:BPT +1.75% , Oil Search /zigman2/quotes/204702973/delayed AU:OSH +1.02% and mining giant Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO +2.06% advanced.
Investors were encouraged by a Chinese government statement Thursday that its penalties on U.S. imports are adequate. That suggested Beijing might be pausing in a tit-for-tat cycle of tariff hikes by both sides that has fueled fears the fight will tip the global economy into recession.
The Chinese comment was a “temporary relief for markets,” said Jingyi Pan of IG in a report. However, Pan cautioned it was in line with the view that Beijing “may delay a deal until the 2020 U.S. elections.”
Some analysts say Beijing might be hoping to strike a more favorable deal if Trump is under pressure during his re-election campaign — or might hold out to negotiate with his successor if he loses.
“This could still make for prolonged trade uncertainty,” said Pan.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.72% rose 1.3% to 2,924.58. The Dow /zigman2/quotes/210598065/realtime DJIA +0.89% climbed 1.3% to 26,362.25. The Nasdaq /zigman2/quotes/210598365/realtime COMP +1.47% gained 1.5% to 7,973.39. The S&P 500 is on track for its first weekly gain in five weeks.
Anxiety about the U.S.-Chinese trade fight fueled market volatility this month.
Washington and Beijing are deadlocked in talks over U.S. complaints about China’s trade surplus and industry plans its trading partners say are based on stealing or pressuring companies to hand over technology.
Tit-for-tat tariff hikes by both sides have depressed trade, prompting fears the fight might tip the global economy into recession.
Negotiators are due to meet next month in Washington after the latest round of talks in July in Shanghai produced no sign of progress.
Benchmark U.S. crude fell 20 cents to $56.51 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 93 cents on Thursday to close at $56.71. Brent crude , used to price international oils, shed 9 cents to $60.40 per barrel in London. It gained 56 cents the previous session to $60.49.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.2076% declined to 106.44 yen from Thursday’s 106.52 yen.