Asia report: China leads surge across region

It was green across most of the board in Asia on Monday, with the region led by a surge on the Chinese bourses, as investors kept a close eye on ongoing trade discussions between the US and China.

In Japan, the Nikkei 225 was up 1.82% at 21,281.85, as the yen weakened 0.12% against the dollar to last trade at JPY 110.60.

The broader Topix index advanced 1.56% in Tokyo, to end the day at 1,601.96.

Fashion retail conglomerate Fast Retailing, which owns the popular Uniqlo brand among others, was ahead 3.9%.

On the mainland, the Shanghai Composite shot up 2.68% to 2,754.36, and the smaller, technology-heavy Shenzhen Composite surged 3.71% to 1,440.95.

South Korea’s Kospi managed gains of 0.67% to close at 2,210.89, while the Hang Seng Index in Hong Kong was 1.6% higher at 28,347.01.

The blue-chip technology plays managed comparatively modest gains in Seoul, with sector behemoth Samsung Electronics 0.33% firmer.

Attention remained firmly on trade talks between Beijing and Washington, with a new round of negotiations set to take place in Washington this week after a marathon five days of discussions in Beijing last week.

Both sides confirmed “progress” had been made following last week’s meetings.

US president Donald Trump, who was the driving force behind the punitive tariffs which led to several rounds of tit-for-tat action between the economic superpowers last year, told journalists at the White House that the US was now the closest it has been to “having a real trade deal”.

He added that he would be very keen to remove the tariffs if an agreement was reached, and once again suggested the 1 March deadline for a deal, imposed by his administration, could be extended.

Oil prices were higher as the region went to bed, with Brent crude last up 0.06% at $66.29, and West Texas Intermediate 0.61% firmer at $55.93 per barrel.

In Australia, the S&P/ASX 200 added 0.39% to settle at 6,089.80, with the energy sector up 1.57%.

Of the big oil players on that subindex, Beach Energy was 3.18% higher and Woodside Petroleum gained 2.3%.

On the political front on Canberra, Australian prime minister Scott Morrison confirmed the federal parliament’s network had been attacked earlier in the month.

Morrison said the government’s experts believed a “sophisticated state actor” was behind the activity.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was the odd one out, falling just 0.002% to 9,245.44.

As the rest of the region looks for reasons to cheer progress in China, New Zealand’s relationship with the People’s Republic has been thrust into the spotlight amid a series of events following Wellington’s decision to block Huawei from participating in the roll-out of 5G mobile technology in the country.

Local reports last week suggested New Zealand exporters were facing delays in their products clearing customs in China, and that Chinese tourists were being discouraged from planning trips to New Zealand - a tactic previously used during China’s diplomatic stoush with Korea.

A fortnight ago, an Air New Zealand flight from Auckland to Shanghai was turned around after the aircraft’s registration paperwork was found to contain the word ‘Taiwan’ among the destinations the airline intended to fly it to.

New Zealand prime minister Jacinda Ardern has delayed a planned official trip to China, and a number of other government officials have reported problems in getting clearance for visits to the nation.

China has had a close economic relationship with New Zealand since the Pacific island nation became the first country to strike a free trade deal with the People’s Republic, removing almost all tariffs, in 2008.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.19% at AUD 1.3976 and the Kiwi advancing 0.12% to NZD 1.4551.