Asia markets subdued as investors digest weekend US-China trade developments

Asian markets were subdued in early Monday trade, with weekend developments in U.S.-China talks, regarded as positive by analysts on the whole, likely to be in the spotlight.

Japan’s Nikkei 225 edged up by 0.13 percent in early Monday trade. The Topix dipped in and out of negative territory, with declines seen in insurers and steelmakers while mining sector stocks climbed.

Over in South Korea, the Kospi slipped 0.26 percent, with declines in the technology sector and steelmakers contributing the overall losses. Similar declines were seen Down Under, with the S&P/ASX 200 shedding 0.24 percent as financials weighed.

MSCI’s index of shares in Asia Pacific excluding Japan edged lower by 0.16 percent in Asia morning trade.

Symbol
Name
Price

 

Change
%Change

NIKKEI

HSI

ASX 200

SHANGHAI

KOSPI

CNBC 100

Developments in the U.S.-China trade relationship were digested by investors as markets opened for trade this week. In particular, immediate fears of a trade war were likely put to rest after U.S. Secretary Steven Mnuchin said Sunday that the countries were “putting the trade war on hold” as they worked out an agreement.

Both countries said they had agreed to “substantially reduce” the U.S. trade deficit with China in a joint statement on Saturday. According to the statement, China would significantly increase its purchases of U.S. goods and services, although it remained unclear how much that would amount to.

“Overall, markets should view this positively at the open this week, but will continue to be attentive to further developments,” ANZ analysts said in a morning note.

U.S. stock index futures, meanwhile, were higher early on Monday Asia time following Mnuchin’s comments, with the implied open for the Dow Jones industrial average about 188 points higher. S&P 500 and Nasdaq futures also pointed to moderate gains.

Stock indexes stateside had closed mostly lower on Friday as investors digested trade-related headlines ahead of the joint statement issued at the weekend.

The declines also came as U.S. Treasury yields rose to multiyear highs last week, although they eased on Friday. The yield on the benchmark 10-year U.S. Treasury note last stood at 3.06 percent after surpassing 3.1 percent for the first time in around seven years earlier in the week.

The dollar index, which tracks the U.S. currency against its peers, stood at 93.706. Against the yen, the greenback fetched 110.90 at 8:01 a.m. HK/SIN.

The Australian dollar traded at $0.7521, a touch above last Friday’s close of $0.7511, with the improvement in investor sentiment seen to be buoying the currency.

In individual movers, shares of LG Electronics were down 0.82 percent in early trade following news on Sunday that the chairman of LG Group, Koo Bon-moo, had passed away. Koo’s son is expected to be nominated to the company’s board as part of succession plans, Reuters said. Other LG affiliates also traded lower, with LG Display slipping 0.66 percent and LG Chem down 1.45 percent.

What’s on tap 

The economic calendar for Monday is fairly quiet (all times in HK/SIN):

  • 10:30 a.m.: Thailand first-quarter GDP
  • 4:30 p.m.: Hong Kong April inflation

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