Asia report: Markets higher as US opens door to further talks with China

Markets in Asia finished their sessions in mostly positive territory on Thursday, after reports that Washington was prepared to go another round of trade negotiations with Beijing amid the threat of possible World Trade Organisation sanctions.

In Japan, the Nikkei 225 was up 0.96% at 22,821.32, as the yen weakened 0.19% against the dollar to last trade at JPY 111.47.

Tokyo’s markets were given a boost after fresh data showed an 11% uptick in core machinery orders for July.

There was one weak point in the market, however, with semiconductor plays falling after a warning from Goldman Sachs about a decline in demand for memory chips.

Advantest was off 5.39%, and Tokyo Electron ended the day down 2.99%.

On the mainland, the Shanghai Composite was ahead 1.15% at 2,686.58, and the smaller, technology-heavy Shenzhen Composite added 0.71% to 1,413.57.

South Korea’s Kospi was 0.14% higher at 2,286.23, while the Hang Seng Index in Hong Kong surged 2.54% to close at 27,014.49.

Samsung Electronics was another victim of Goldman’s semiconductor predictions, finishing its Thursday 1.12% lower.

Trade sentiment was elevated for the first time in several sessions amid reports that the US was preparing proposals for a fresh round of trade talks with China.

That came after news earlier in the week that China was set to ask the World Trade Organisation for permission to lay down sanctions against the US, following the Trump administration’s decision last week to apply a fresh round of punitive tariffs on more than $250bn worth of Chinese goods.

Oil prices were lower, with Brent crude last down 0.75% at $79.15 per barrel, and West Texas Intermediate falling 1.31% to $69.46.

In Australia, the S&P/ASX 200 slid 0.76% to 6,128.70, even after employment figures for August beat expectations by rising 44,000.

“The strong market is clearly a source of strength for household incomes and if sustained points to stronger wages growth,” noted AMP Capital head of investment strategy Shane Oliver.

Rising household debt and stagnant wage growth has been a source of consternation for economists and politicians in the sunburnt country for some time.

A Reuters poll had the anticipated figure at just 15,000 ahead of the data.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.6% at 9,248.99.

The headlines in the country were dominated by the news that Fonterra - a farmer cooperative and the world’s largest dairy exporter - had posted its first annual loss since formation in 2001.

Fonterra posted a loss attributable to shareholders of NZD 221m, with the board reporting that all its divisions were under pressure.

The down under dollars were a mixed affair against the greenback, with the Aussie last 0.17% stronger at AUD 1.3921, and the Kiwi weakening 0.2% to NZD 1.5271.