Asia report: Most markets higher ahead of US-China deal signing

Markets in Asia ended mostly in the green on Tuesday, as sentiment turned more positive ahead of the signing of the first phase trade deal between the United States and China later in the week.

In Japan, the Nikkei 225 returned from a public holiday to rise 0.73% to 24,025.17, as the yen weakened 0.02% against the dollar to last trade at JPY 109.97.

Of the major components on the benchmark index, automation specialist Fanuc was up 1.19%, Uniqlo owner Fast Retailing rose 2.18%, and technology conglomerate SoftBank Group surged 3.51%.

The broader Topix index was 0.31% firmer in Tokyo, closing its trading day at 1,740.53.

On the mainland, the Shanghai Composite was 0.28% lower at 3,106.82, and the smaller, technology-heavy Shenzhen Composite slipped 0.23% to 1,818.13.

In fresh data out of China, the country’s dollar-denominated imports from the United States were higher in November and December, according to customs data as reported by Reuters.

For December, the country’s trade surplus with the US slipped to $23.18bn, from $24.6bn in November.

Of particular note was the fact that China’s pork and soybean imports from the US were markedly higher in December, after Washington demanded that Beijing purchases more agricultural goods as part of the trade deal.

South Korea’s Kospi was 0.43% higher at 2,238.88, while the Hang Seng Index in Hong Kong slid 0.24% to 28,885.14.

Both of the blue-chip technology stocks were flat in Seoul, with both Samsung Electronics and SK Hynix closing the day unchanged.

Investors were very much looking forward to the signing of the first phase trade deal between Beijing and Washington, taking place in the latter city on Wednesday.

Ahead of the signing, the US removed China from its list of currency manipulators overnight, over five months after the Treasury added it to the list, saying at the time that the People’s Bank had been artificially weakening renminbi.

London Capital Group analyst Jasper Lawler noted that "some of the meat of the deal is starting to emerge", as the US removed China’s status as a currency manipulator.

"For their part, China has agreed to buy $80bn extra manufacturing goods and $50bn more energy supplies from the US over the next two-years as part of the phase-one deal,” he noted.

“Services and agricultural goods will also get multi-billion-dollar boosts.

"The purchases represent a direct increase in economic activity and a thawing of the US-China tensions, which it is hoped will open up international trade more generally."

Oil prices were higher as the region went to bed, with Brent crude last up 0.64% at $64.61 per barrel, and West Texas Intermediate rising 0.46% to $58.35.

In Australia, the S&P/ASX 200 was 0.85% higher at 6,962.20, as the major miners rose in the sunburnt country.

BHP Group was ahead 1.32%, Fortescue Metals was 1.85% higher, and Rio Tinto also gained 1.85%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 added 0.71% to 11,625.13, led higher by utilities software firm Gentrack, which was ahead 2.9%.

The down under dollars were mixed against the greenback, with the Aussie flat at AUD 1.4485, as the Kiwi weakened 0.13% to NZD 1.5101.