By Ese Erheriene
Asian stocks rose as last week’s global w orries about the U.S. political landscape continued to ease, with Australian stocks stabilizing after their worst performance in months.
Worries stemming from U.S. political uncertainty faded with President Donald Trump traveling in the Middle East and later this week to Europe. Investors also largely shrugged off further missile tests by North Korea over the weekend.
“However ongoing concerns about the potential for instability in U.S. politics and subsequent questions around the implementation of a stimulus agenda could see a reversal in sentiment at any time,” cautioned Michael McCarthy, chief market strategist at CMC.
Following bank-led declines last week, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.68% was recently up 0.9% as Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA +1.36% gained 1.4%. Further rebounds in commodity prices also helped.
After rising 9% the past two weeks, oil rose a further 1% in Asian trading Monday. Looming is Thursday’s meeting of the Organization of the Petroleum Exporting Countries, at which an extension to ongoing production cuts is expected.
Japan stocks, which also dragged last week, were solidly higher Monday.
Last week, the Nikkei’s month-long winning streak snapped with a 1.5% decline, moving the index back from 20000—above which it hasn’t traded since December 2015. The Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.08% was up 0.5% after the midday break as the dollar has stabilized at around ¥111.50 after briefly dipping below ¥111 before markets opened in Asia.
In Japan, exports rose 7.5% in April, buoyed by strong demand in Asia for semiconductors, semiconductor-making equipment and steel. It marked the fifth-consecutive month of rising exports.
Steel, energy and machinery names—beneficiaries of global growth—led the gains in Tokyo. Nippon Steel & Sumitomo Metal /zigman2/quotes/200718273/delayed JP:9432 +0.39% added 3.2%, SMC rose 2.7% and Inpex /zigman2/quotes/206689846/delayed JP:1605 +0.05% was up 1.2%.
Meanwhile, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.79% and Korea’s Kospi Index /zigman2/quotes/210598069/delayed KR:180721 +0.36% were on track for new highs on Monday. The Hang Seng rose nearly 1%, setting the stage for a fresh 22-month closing high. The Korean index gained 0.5%, putting it above the latest closing record set earlier this month.
North Korea’s missile test was the eighth so far this year, including two failed tests. Still, South Korean stocks have been unfazed, with the Kospi up 13% this year.
Meanwhile, Indonesia’s JSX benchmark stock index /zigman2/quotes/210597981/delayed ID:JAKIDX -0.09% continued to push into record territory of its own after late Friday’s 2.6% surge caused by Standard & Poor’s moving the country’s sovereign-debt rating into investment-grade territory. Jumping as much as 1.4% in morning trading, the index was recently up 0.7%.
Investment bank DNB sees the move likely being short-lived, contending Indonesia’s improved economic fundamentals the past three years were already in investors’ calculus. The JSX has risen 45% from September 2015’s low.
Arguably last week’s upside standout, China is back to lagging other Asian stocks markets. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.24% was down 0.2%.