Asian Stocks Rise amid Progress in Trade Talks

By Investors Hub

Asian stocks rose broadly on Monday as investors cheered signs of progress in high-level trade talks and positive manufacturing data from China.

Beijing announced that it would continue to suspend additional tariffs on U.S. vehicles and auto parts after April 1 as a gesture after Washington delayed tariff hikes on Chinese imports. A delegation led by Vice Premier Liu He will be in Washington this week for another round of talks.

China’s Shanghai Composite Index soared 79.60 points or 2.6 percent to 3,170.36, its highest closing level since May 2018, as investors cheered signs of progress in trade talks and signals of an economic recovery. Hong Kong’s Hang Seng Index jumped 510.66 points or 1.8 percent to 29,562.02.

Underlying sentiment was boosted after official data showed Chinese factory activity in March unexpectedly grew for the first time in fourth months.

The Caixin/Markit PMI also showed the manufacturing sector in the world’s second biggest economy returning to growth.

Japanese shares ended off their day’s highs after a central bank survey showed Japanese business confidence hit a two-year low in the March quarter, underscoring renewed concerns surrounding global demand.

Another private survey showed that manufacturing activity in the country contracted for a second straight month in March, with output falling at the sharpest rate in nearly three years.

The Nikkei 225 Index still ended the day up 303.22 points or 1.4 percent at 21,509.03, while the broader Topix closed 1.5 percent higher at 1,615.81.

A weaker yen lifted exporters, with Canon, Sony, Panasonic, Toyota and Honda Motors climbing 1-3 percent.

In the tech sector, Advantest rallied 2.7 percent and Tokyo Electron added 2.3 percent. Banks Mitsubishi UFJ Financial and Sumitomo Mitsui Financial ended up around 1.6 percent.

Apple supplier Japan Display, which is making final arrangements to raise about 100 billion yen from a China-Taiwan consortium and Japanese public-private investment fund INCJ Ltd., soared 10 percent.

Nomura Holdings gained 2.2 percent after it received approval from Chinese regulators to establish a majority-controlled brokerage in China.

Australian markets ended notably higher as strong manufacturing data from China bolstered miners. The benchmark S&P/ASX 200 Index climbed 36.30 points or 0.6 percent to 6,217.00, while the broader All Ordinaries Index ended up 38.00 points or 0.6 percent at 6,299.70.

Mining heavyweights BHP and Rio Tinto rose around 2 percent after Chinese iron ore futures rallied on Friday. Smaller rival Fortescue Metals Group jumped 4.5 percent.

The big four banks gained between 0.3 percent and 1 percent ahead of Tuesday’s central bank meeting and the federal budget.

Supermarket chain Woolworths Group rallied 2.2 percent as it announced the closure of around 30 stores over the next three years.

On the other hand, gold miners Evolution and Newcrest fell over 1 percent on improved risk appetite.

Bubs Australia also dropped 1.2 percent after it acquired Australia Deloraine Dairy, a canning facility in Australia that meets regulatory import conditions into China.

Seoul stocks climbed on renewed hopes for a settlement in the U.S.-China trade war. The benchmark Kospi rallied 27.61 points or 1.3 percent to 2,168.28. Chipmaker SK Hynix jumped 3.2 percent and steelmaker Posco soared 5.3 percent.