By Joanne Chiu
KOREA SUMMIT PRESS POOL/AFP/Getty Images
Asian stocks extended gains Friday, as investor concerns over geopolitical risks eased.
Trade tensions, North Korea and the conflict in Syria have been big factors in 2018 but with looming trade talks between the U.S. and China and the leaders of North and South Korea meeting Friday, sentiment is ending the week on a positive note.
The summit between Kim Jong Un and South Korean President Moon Jae-in “is a good step forward,” said James Cheo, senior investment strategist at Bank of Singapore. “But it’s too early to tell that if it could have a lasting impact” on resolving tensions between the countries.
South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% closed up 0.7%. Samsung /zigman2/quotes/209800866/delayed KR:005930 -1.33% climbed a further 1.7% after Thursday’s first-quarter report. Friday was the last trading day before next week’s 50-for-1 stock split for Samsung.
The Nikkei 225 /zigman2/quotes/210597971/delayed JP:NIK -0.39% ended the day up 0.7%. Japanese markets barely budged as the Bank of Japan made no changes to its interest rates or bond-buying program. The Bank of Japan also abandoned its attempt to predict when the nation will reach 2% inflation, another sign that Japan has yet to fully escape its long period of falling prices.
Steven Leung, an executive director at UOB Kay Hian, said while consensus-beating corporate results continue to give the global stock market support, all eyes will be on next week’s trade talks between the U.S. and China in Beijing.
“Investors will be looking for any message about the U.S.’s stance on Huawei and ZTE from the upcoming meeting,” after scrutiny on the two Chinese tech giants has dragged Chinese stocks lower recently, he said.
China’s Shenzhen A-Share index /zigman2/quotes/210598014/delayed CN:180171 +1.13% rose 0.3% after a fall of over 2% Thursday.
China’s tech sector has been under scrutiny from investors after U.S. moves against telecom-equipment maker ZTE /zigman2/quotes/209674390/delayed CN:000063 +2.15% and possible action against peer Huawei Technologies.
Huawei scrapped plans for a bond sale Thursday following revelations that the Justice Department is investigating whether the Chinese cellular giant violated U.S. sanctions related to Iran.
Chinese tech stocks are likely to remain under pressure on concerns that more companies could be targeted by the U.S., said Frederick Wong, chief investment officer at hedge fund eFusion Capital.
The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.31% turned higher to close up by 0.3%. Because of a holiday, this is the month’s final trading day and action won’t resume until Wednesday.
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