Asia report: Stocks rise as investors catch their breath from trade war

Most markets in Asia were in the green on Tuesday, as investors took the opportunity to catch their breath amid a recent torrent of developments on the US-China trade front.

In Japan, the Nikkei 225 was down 0.14% at 21,272.45, as the yen weakened 0.28% against the dollar to last trade at JPY 110.37.

Of the major components on the Tokyo benchmark, automation specialise Fanuc was up 0.27%, fashion firm Fast Retailing added 0.2%, and technology conglomerate SoftBank Group surged 3.53%.

Tokyo Electron was a big loser, however, sliding 1.88% by the end of the session.

The broader Topix index was 0.3% below the waterline, closing at 1,550.30.

On the mainland, the Shanghai Composite added 1.23% to close at 2,905.97, and the smaller, technology-heavy Shenzhen Composite rose 1.77% to 1,548.68.

South Korea’s Kospi was 0.27% firmer at 2,061.25, while the Hang Seng Index in Hong Kong lost 0.47% to settle at 27,657.24.

The blue-chip technology stocks were mixed in Seoul, with chipmaker SK Hynix down 0.85%, while technology behemoth Samsung Electronics motored ahead by 2.74%.

Analysts were expecting restrictions on Huawei to have a positive effect for Samsung’s own smartphone division, with many consumers likely to opt for the latter’s offering should the functionality of Huawei devices be curtailed by the Commerce Department.

Samsung is the world’s largest smartphone manufacturer, with Huawei now in second place after shooting past US firm Apple in the rankings in late 2018.

Overnight on Monday, reports emerged that the US was temporarily easing some of the restrictions it had placed on the ability of American firms to do business with China telecoms giant Huawei.

Concerns for the future of the firm swelled during Asia hours on Monday, after Alphabet division Google confirmed it was being forced to cancel Huawei’s licence to use the official version of the Android operating system on its smartphones by the restriction.

The reports on Tuesday suggested the US Commerce Department was prepared to allow Huawei Technologies to purchase US goods to ensure it could maintain existing network equipment, and provide up-to-date software to existing Huawei smartphones.

“This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are,” said London Capital Group head of research Jasper Lawler.

“Yesterday was a big reality check for Trump and shows the incomplete information available for his decision.”

Lawler said it would not be a one-day event.

“Huawei is entrenched on so many parts of the tech sector, this could take days or weeks to untangle.”

Oil prices were higher as the region went to bed, with Brent crude last up 0.48% at $72.32 per barrel, and West Texas Intermediate ahead 0.57% at $63.57.

In Australia, the S&P/ASX 200 was up 0.37% at 6,500.10.

The prospect of lower interest rates was on the cards for the sunburnt country, as Reserve Bank of Australia governor Philip Lowe confirmed the central bank would consider such a move at its June policy meeting.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.2% at 10,216.09, led lower by regulated broadband network operator Chorus, which was 5.8% lower.

The country’s Commerce Commission issued a number of papers on its new regulation regime for fibre networks in the country, which led to some disappointment among investors as to the rate of return Chorus could be allowed to earn.

Chorus has a regulated monopoly on gigabit fibre in many parts of New Zealand, under the country’s state-sponsored ultrafast broadband programme.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.5% at AUD 1.4547, and the Kiwi retreating 0.43% to NZD 1.5370.