By Marketwatch and Associated Press
Asian shares saw a mostly positive session Friday, led by a rally for the Shanghai Composite as some investors grew hopeful that China and the U.S. would carve out a trade deal, though there was some speculation Chinese officials may have intervened to boost that market.
The Trump administration rose tariffs to 25% from 10% on $200 billion of Chinese goods at 12:01 a.m. Friday. Still, President Donald Trump said Thursday he had received a “beautiful” letter from China’s President Xi Jinping and said a trade deal with China was still possible this week. U.S. and Chinese negotiators agreed to meet again Friday, in a positive sign following speculation that Thursday’s meeting in Washington was simply perfunctory.
The tariff hikes reportedly won’t hit goods that have already left Chinese ports before Friday’s deadline, so they won’t start taking affect until those shipments complete the three- to four-week voyage across the Pacific Ocean, in effect buying negotiators a little time to still work out a deal.
China has threatened to retaliate if President Donald Trump goes ahead with the tariff hikes, adding to the heated rhetoric from both sides that was shaking stock markets around the world.
Negotiators from both countries met Thursday and are continuing to meet Friday.
Leading gains for those markets, the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.43% advanced 3%, marking its best one-day percentage gain since March, while the smaller-cap Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 +0.82% jumped 3.8%.
“Investors could be betting that China’s retaliation could force Trump to back down and come to an amicable conclusion,” said Russ Mould, investment director at AJ Bell. “Another suggestion is that the Chinese government has ordered representatives – often called the ‘national team’ – to buy shares in the market and restore some sense of normality.”
A slightly less pronounced gain was seen from Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +1.07% which closed up 0.8%. Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +0.23% gave up initial gains and finished down 0.2%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.02% rose 0.3%, while benchmark indexes in Taiwan , Singapore /zigman2/quotes/210597985/delayed SG:STI +0.65% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.56% were mixed. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.36% was flat.
Among individual stocks, Takeda Pharmaceutical /zigman2/quotes/201302442/delayed JP:4502 -1.44% rose a day after selling about $5.3 billion in assets to Novartis /zigman2/quotes/203243705/composite NVS +0.47% and Johnson & Johnson’s /zigman2/quotes/201724570/composite JNJ +0.59% Ethicon to help pay down debt. Fast Retailing /zigman2/quotes/200663563/delayed JP:9983 +0.33% and Honda /zigman2/quotes/200490352/delayed JP:7267 +0.48% also advanced in Tokyo trading. In Hong Kong, Sunny Optical /zigman2/quotes/206687505/delayed HK:2382 +5.72% surged higher, and Tencent /zigman2/quotes/204605823/delayed HK:700 +1.70% and CSPC Pharmaceutical /zigman2/quotes/200847219/delayed HK:1093 +1.13% also rose. Samsung /zigman2/quotes/209800866/delayed KR:005930 +1.82% gained in South Korea. Fortescue Metals /zigman2/quotes/202351558/delayed AU:FMG -0.60% and Oil Search /zigman2/quotes/204702973/delayed AU:OSH -0.56% moved higher in Australia.
Benchmark U.S. crude reversed earlier losses to gain 30 cents to $62.01 a barrel in electronic trading on the New York Mercantile Exchange. It dropped 0.7% to settle at $61.70 per barrel overnight. Brent crude , the international standard, was up 53 cents at $70.90 a barrel.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0157% eased to 109.73 Japanese yen from 109.77 yen.