Asia equities higher after Middle East tension eases


Friday 05.30 BST

What you need to know

  • Japanese, Australian equities climb
  • China, Hong Kong stocks pull back on disappointing trade data
  • Hong Kong intervenes to support currency
  • Oil prices ease

Overview

Asia-Pacific stocks tracked Wall Street higher after Donald Trump toned down his rhetoric on the timing of a missile attack on Syria and was said to be examining joining a regional trade pact.

Hot topic

Japan’s Topix index was up 0.6 per cent after touching a four-week high earlier in the session. The industrials sector climbed 0.8 per cent and technology stocks were up 0.7 per cent. Uniqlo owner Fast Retailing rose as much as 3.5 per cent to a 10-week high after it upped its full-year profit outlook.

In Australia, the S&P/ASX 200 was up 0.4 per cent and on course to snap a two-day losing streak. Australian-listed shares in New Zealand’s Fletcher Building jumped more than 10 per cent on a report in the Sydney Morning Herald that Wesfarmers had bought a 3 to 4 per cent stake in the company and was eyeing a takeover bid.

The Hang Seng index in Hong Kong gave up earlier gains in the wake of disappointing March trade figures from China showing the first trade deficit in more than a year. The index was off 0.1 per cent at the lunch break. The Hang Seng China Enterprises index of Hong Kong-listed mainland Chinese stocks slipped 0.3 per cent and the CSI 300 index of Shanghai and Shenzhen stocks dipped 0.4 per cent.

South Korea’s Kospi climbed 0.5 per cent.

The White House said on Thursday that the president had spoken to the leaders of France and the UK over potential military strikes on Syria. Mr Trump tweeted on Thursday that he had “[never] said when an attack on Syria would take place. Could be very soon or not so soon at all!”

Separately, Mr Trump was said to have ordered his top economic advisers to examine whether the US should rejoin the Trans-Pacific Partnership trade pact. He tweeted late on Thursday in the US that the country would only rejoin if the deal was “substantially better than the deal offered to Pres. Obama”.

Overnight on Wall Street, the S&P 500 closed 0.8 per cent higher while the Dow Jones Industrial Average gained 1.2 per cent and the tech-heavy Nasdaq Composite ended 1 per cent higher.

Forex

The dollar index, a measure of the greenback against a basket of peers, was flat, as was the yen, which hovered at ¥107.37 against the dollar. The pound weakened a touch to $1.4231 and the euro was unchanged at $1.2327.

The Hong Kong dollar was trading at HK$7.8498 after the city’s de facto central bank intervened to support the currency on Thursday after it fell to the lower end of its permitted trading band, hitting a fresh 34-year low.

The move marked the first intervention by the Hong Kong Monetary Authority since the current HK$7.75 to HK$7.85 trading band was introduced in 2005. It intervened for a second time on Friday morning.

Fixed income

The yield on the 10-year US Treasury fell 2 basis points to 2.817 per cent while that for equal-maturity Japanese government was virtually unchanged at 0.023 per cent.

Commodities

Oil prices eased, with Brent crude down 0.3 per cent at $71.78 a barrel after climbing above $73 a barrel on Wednesday to its highest in almost four years, over concerns about Syria and reports that Saudi Arabia had intercepted a rocket above Riyadh. US marker West Texas Intermediate was off 0.3 per cent at $66.85 a barrel.

Gold rose 0.4 per cent to $1,340.1 an ounce.

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