Asia report: Markets rise on US-China trade optimism

Markets in Asia were higher across the board on Tuesday, as investor sentiment around the trade relationship between the United States and China remained buoyant.

In Japan, markets were closed for a public holiday for the enthronement of the country’s new emperor Naruhito, as the yen strengthened 0.01% against the dollar to last trade at JPY 108.61.

On the mainland, the Shanghai Composite added 0.5% to 2,954.38, and the smaller, technology-heavy Shenzhen Composite gained 1.01% to 1,631.21.

South Korea’s Kospi rose 1.16% to 2,088.86, while the Hang Seng Index in Hong Kong added 0.23% to 26,786.20.

Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 1.79% and chipmaker SK Hynix ahead 2.06%.

Sentiment was positive throughout the Asian day, after gains on Wall Street overnight following comments from Donald Trump’s chief economic advisor Larry Kudlow inferring that cancelling December’s planned hikes in punitive tariffs on Chinese goods was likely if trade talks remained positive.

At the same time as Kudlow’s comments, which were made to Fox Business Network, the US Commerce Secretary Wilbur Ross said a “proper deal” was more important to both sides than seeking a precise date for the signing of any agreement.

US president Trump and his Chinese counterpart Xi Jinping are likely to meet at the Asia-Pacific Economic Cooperation meetings in Chile next month, with many market participants looking for a partial deal to be signed at the summit.

“Although both the US and Chinese governments have good reason to celebrate their success if a trade deal is signed next month, there are set to be plenty of loose ends in any near-term trade pact,” noted analysts at Rabobank.

“There is no mention of Huawei in recent talks.

"Intellectual property rights and other reforms may also fail to reach the levels previously demanded by the US.”

Oil prices were higher as the region went to bed, with Brent crude last up 0.41% at $59.20, and West Texas Intermediate also adding 0.41% to $53.73.

In Australia, the S&P/ASX 200 managed gains of 0.3% to 6,672.20, as the materials subindex rose 1.05% and the energy sector added 0.45%.

Looking at the major miners on the Sydney bourse, BHP was up 1.17%, Fortescue Metals added 2.4%, and Rio Tinto advanced 1.49%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.3% at 11,090.39, although casino operator SkyCity Entertainment lost 2.8% as a massive fire raged at the construction site of its new convention centre in Auckland.

Firefighters made the decision to allow the fire, centred on the site’s membrane roof, to burn through the night for the safety of firefighters, as public health officials sent alerts to smartphones in the area advising people to stay indoors and turn off air conditioning, with the city’s commercial heart remained cloaked in a thick cloud of toxic black smoke.

The company won the right to construct the mammoth convention centre several years ago, agreeing to foot the entire bill in exchange for government approval to an expansion to its mega casino located across the road, although it had since suffered from delays and cost overruns to the project.

Fletcher Building - the already-ailing construction conglomerate that acts as the main contractor on the convention centre project - ended the day 1.48% lower.

It was a mixed picture for the down under dollars, with the Aussie last 0.17% weaker on the greenback at AUD 1.4586, while the Kiwi advanced 0.15% to NZD 1.5593.