Asia report: Markets close mixed after signing of trade deal

Markets in Asia were mixed as they closed on Thursday, as investors reacted to the signing of a much-anticipated first phase trade deal between the US and China overnight.

In Japan, the Nikkei 225 was up 0.07% at 23,933.13, as the yen weakened 0.07% against the dollar to last trade at JPY 109.98.

Uniqlo owner Fast Retailing was once again higher on the benchmark index, rising 1.38%, while automation specialist Fanuc lost 0.87% and technology conglomerate SoftBank Group fell 2.15%.

The broader Topix index was in the red by the close in Tokyo, falling 0.14% to settle at 1,728.72.

On the mainland, the Shanghai Composite was down 0.52% at 3,074.08, and the smaller, technology-heavy Shenzhen Composite slipped 0.15% to 1,811.57.

South Korea’s Kospi was up 0.77% to 2,248.05, while the Hang Seng Index in Hong Kong managed gains of 0.38% to 28,883.04.

Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 2.88% and chipmaker SK Hynix ahead 1.02%.

Markets had their first chance to react to the signing of the phase one trade deal between Beijing and Washington during the day, following a ceremony in the US federal capital on Wednesday.

The agreement included a $200bn increase in purchases of US goods by China over two years, as well as pledges from the Asian nation over intellectual property and technology transfer regulations - two major sticking points for the US in negotiations.

“Maybe with the trade deal signed we can refocus on the data and, more importantly, what to the reaction function of the Fed will be to any softness in the coming months,” said Neil Wilson, chief market analyst at Markets.com.

“Yes, the deal may be a bit puny for some, and there are plenty of risks ahead, but in coming to this agreement they’ve apparently averted never ending war.

“And doubts about the details of the deal had surfaced in recent days, so the fact it’s done is a relief.”

Wilson said the truce would require calm on both sides to prevail, and for “a far more substantive” second phase deal to be reached.

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.59% at $64.38 per barrel, and West Texas Intermediate 0.35% higher at $58.01.

In Australia, the S&P/ASX 200 was 0.67% firmer at 7,041.80, with the hefty financials subindex ahead 1.07% by end-of-play in Sydney.

The so-called big four banks were in the green, with Australia and New Zealand Banking Group up 0.67%, Commonwealth Bank of Australia ahead 0.96%, National Australia Bank 0.75% higher, and Westpac Banking Corporation rising 0.85%.

Across the Tasman, New Zealand’s S&P/NZX 50 was ahead 0.52% at 11,737.86, with exporters among the leading risers following the signing of the US-China deal.

Specialist dairy exporter A2 Milk was up 1.7%, medical device manufacturer Fisher & Paykel Healthcare added 1.9%, and the Fonterra Shareholders’ Fund - a mechanism used to trade equity in the country’s largest dairy cooperative - was 0.8% firmer.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.24% at AUD 1.4444, and the Kiwi advancing NZD 1.5039.