Asia Markets: Fed restraint, trade hopes bolster Asian markets
Asian markets were mostly higher on Friday as investors cheered a more restrained Federal Reserve and U.S.-China trade talks.
Japan’s Nikkei 225 index NIK, +0.97% advanced 0.7% and South Korea’s Kospi SEU, +0.58% was 0.4% higher. Hong Kong’s Hang Seng HSI, +0.44% rose 0.1%. The Shanghai Composite index SHCOMP, +0.60% was up 0.1%. Australia’s S&P ASX 200 XJO, -0.36% lost 0.2%. Shares rose Taiwan Y9999, +0.40% , Singapore STI, +0.56% and Malaysia FBMKLCI, -0.11% .
Among individual stocks, Japan’s Fast Retailing 9983, +6.19% , owner of Uniqlo stores, jumped 6% despite reporting an 8% slump in year-over-year operating profit last quarter. Shares of camera makers Olympus 7733, +9.88% and Nikon 7731, +4.21% also jumped. In Hong Kong, Apple AAPL, +0.32% component makers AAC 2018, +4.32% and Sunny Optical 2382, +1.72% continued to rebound from last week’s losses. Samsung 005930, +1.63% rose more than 1% in Korea.
Earlier, U.S. stocks bounced back from a rocky start on Thursday, recording their fifth straight gain. Macy’s M, -17.69% suffered its biggest loss of all time, putting a drag on retailers. But industrial companies rallied after U.S. negotiators said China had agreed to buy more energy and agricultural products and manufactured goods. The S&P 500 index SPX, +0.45% gained 0.5% to 2,596.64. The Dow Jones Industrial Average DJIA, +0.51% added 0.5% to 24,001.92 and the Nasdaq composite COMP, +0.42% was up 0.4%6,986.07.
In a speech on Thursday, Federal Reserve Chairman Jerome Powell stressed that the central bank has the “ability to be patient” with its plans to gradually raise interest rates. He echoed the tone of Fed officials who were present at a meeting last month. Minutes of the meeting, which were released a day earlier, showed the officials believed that the central bank could afford to be “patient” with rate hikes, given volatile stock markets, trade tensions and shaky global growth. A market-sensitive Fed is reassuring to investors who fear its tightening policies would send the U.S. economy into recession.
Talks between American and Chinese negotiators may have ended without significant breakthroughs, but traders are choosing to focus on the positives. The fact that talks lasted a day longer than planned, the release of conciliatory statements from both sides and the possibility of higher-level talks in the near future are fueling gains in Asia. Treasury Secretary Steve Mnuchin said late Thursday that he expects China top trade official, Vice Premier Liu He, to visit the U.S. for more trade talks later this month.
“Positive signs on the trade war front continue to resonate favorably with investors, all of which suggest Asia stocks are ready for gains,” Stephen Innes, head of Asia Pacific trading at Oanda, said in a Friday research note.
Oil prices eased after rallying for the ninth consecutive day. Benchmark U.S. crude CLG9, -0.04% dropped 18 cents to $ 52.41 per barrel in electronic trading on the New York Mercantile Exchange. The contract is has surged by 23.7 percent since Dec. 24. It added another 23 cents to $ 52.59 per barrel on Thursday. Brent crude LCOH9, -0.19% , used to price international oils, shed up 29 cents to $ 61.39 per barrel. It gained 24 cents to $ 61.68 per barrel in London.
The dollar USDJPY, -0.04% eased to 108.26 yen from 108.43 yen late Thursday.
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