Asia report: Markets turn higher amid US-China talks

Markets in Asia finished higher on Friday, as optimism around the ongoing trade negotiations between the US and China grew.

In Japan, the Nikkei 225 was up 1.15% at 21,798.87, as the yen weakened 0.15% against the dollar to last tradea t JPY 108.14.

Of the major components on the benchmark index, automation specialist Fanuc was up 1.38% and technology conglomerate SoftBank Group slipped 0.81%.

Fast Retailing, which owns global fast fashion brand Uniqlo among other domestic Japanese brands, was up 2.63% after it reported a record profit in the previous session.

The broader Topix index managed gains of 0.88% to finish the trading day in Tokyo at 1,595.27.

On the mainland, the Shanghai Composite added 0.88% to 2,973.66, and the smaller, technology-heavy Shenzhen Composite was ahead 0.31% to 1,636.96.

South Korea’s Kospi was 0.81% firmer at 2,044.61, while the Hang Seng Index in Hong Kong rose 2.34% to 26,308.44.

Both of the blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 1.24% and SK Hynix ahead 1.27%.

Expectations that real progress could be made on the US-China trade front were raised overnight, after US president Donald Trump tweeted that he would meet China’s vice-premier Liu He on Friday.

The two economic superpowers were reported to have made no progress in deputy-level discussions that took place earlier in the week, with high-level negotiations kicking off in Washington on Thursday.

It had been rumoured that the Chinese delegation was preparing to leave the talks early after a lack of progress, but the prospect of a meeting between Trump and Liu put paid to that concern.

Spreadex analyst Connor Campbell said that there had been an “abrupt shift in sentiment in the last 24 hours - even if the markets may be setting themselves up for a fall if past patterns are anything to go by.

“While we have been here many times before - Trump is a master market manipulator - it has instilled a renewed optimism regarding a deal that stands in stark contrast to the pessimism that opened the week.”

The trade spat between the US and China wasn’t the only geopolitical development, however, with officials from Tokyo and Seoul expected to meet in Geneva on Friday to discuss their ongoing dispute.

Japan has placed stricter controls on the export of critical materials to South Korean technology companies, as a result of a dispute over wartime labour between the two nations.

Oil prices were higher as the region entered the weekend, with Brent crude last up 1.63% at $60.08 per barrel, and West Texas Intermediate rising 1.73% to $54.49.

In Australia, the S&P/ASX 200 finished its session up 0.91% at 6,606.80, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.34% higher at 10,923.71.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.54% at AUD 1.4711, and the Kiwi advancing 0.34% to NZD 1.5767.