Asia report: Markets mixed as investors pine for optimism on trade

In Japan, the Nikkei 225 was up 0.32% at 23,112.88, as the yen strengthened 0.06% against the dollar to last trade at JPY 108.57.

The major components of the benchmark index were glittering green, with Fanuc up 0.76%, Fast Retailing rising 0.14%, and SoftBank Group 0.05% firmer.

Video games giant Nintendo was down 3.51%, however, after analysts at Morgan Stanley downgraded the stock to ‘equal weight’ from ‘overweight’.

The broader Topix index was 0.12% above the waterline by the end of play in Tokyo, closing at 1,691.34.

On the mainland, the Shanghai Composite was 0.63% lower at 2,885.29, and the technology-focussed Shenzhen Composite slid 1.45% to 1,607.51.

South Korea’s Kospi managed gains of 0.26% to close at 2,101.96, while the Hang Seng Index in Hong Kong added 0.48% to end the trading session at 26,595.08.

Both of the blue-chip technology stocks finished positive in Seoul, with Samsung Electronics up 1.18% and SK Hynix adding 0.99%.

Investors across the region were struggling to work out which direction talks between Beijing and Washington were going at the end of a roller-coaster week on the trade war front.

A report overnight from the Wall Street Journal claimed that Chinese vice-premier Liu He had invited US trade representative Robert Lighthizer and Treasury secretary Steven Mnuchin to Beijing for further negotiations on a phone call late last week.

While it was not clear whether the US side had accepted the invitation, the Journal suggested officials in Washington were keen to meet with their Chinese counterparts.

Hong Kong-based newspaper, the South China Morning Post, said on Friday that, according to a source close to the Trump administration, the two economic superpowers were at the “doorstep” of reaching a first phase agreement.

Earlier in the week, US lawmakers presented a stumbling block to the negotiations with the passing of a bill intended to support protestors in the ongoing violent demonstrations in Hong Kong.

Beijing said the US was interfering in its domestic affairs by passing the bill, although Donald Trump was still yet to sign it into law.

Chinese president Xi Jinping tried to stoke the flames of optimism during the day, saying he wanted to reach an initial trade agreement with Washington on the basis of mutual respect and equality, adding that Beijing was "working actively” to try and avoid a trade war.

“A convincing case could be made for this being completely meaningless,” said Spreadex analyst Connor Campbell.

“Yet given investors are devouring every morsel of trade deal news, it was enough to send the markets back into the green.”

Oil prices were mixed as traders in the region hung up their coats for the weekend, with Brent crude last up 0.02% at $63.98 per barrel, while West Texas Intermediate lost 0.19% to $58.47.

In Australia, the S&P/ASX 200 was 0.55% stronger at 6,709.80, as local finance behemoth Westpac Banking Corporation fell for a third day, this time by 1.55%.

That came after Goldman Sachs cut its price target on Westpac shared by 10%, following a tumultuous week in which Australia’s anti-money laundering and terrorism finance watchdog filed for civil penalties against the company.

AUSTRAC - the federal agency - alleged Westpac’s “oversight of the banking and designated services provided through its corresponding banking relationships was deficient”.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.1% lower at 10,946.30, led south by utilities software company Gentrack, which slid 12.6% after it issued a warning on its earnings for the financial year just ended.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.02% at AUD 1.4731, and the Kiwi advancing 0.14% to NZD 1.5595.