Asian Shares End On Muted Note

Asian stocks ended Wednesday’s session on a muted note despite the U.S. temporarily lifting a ban on American businesses working with Chinese telecom giant Huawei.

Markets kept an eye on the minutes of the May FOMC meeting due out later in the day as a protracted trade war threatens to depress global economic growth.

The Organization for Economic Co-operation and Development has lowered the 2019 global growth outlook as escalating trade disputes hurt manufacturing and investment decisions.

In its latest Economic Outlook, published Tuesday, the Paris-based think tank forecast 3.2 percent growth for 2019 versus 3.3 percent estimated in March.

China’s Shanghai Composite index ended down 14.26 points or 0.49 percent at 2,891.70 as trade tensions continued to linger. Hong Kong’s Hang Seng index inched up 48.70 points or 0.18 percent to 27,705.94.

In a speech at Jiangxi, Chinese President Xi Jinping called for the people to “start again” and begin a modern “long march,” in a dramatic sign that Beijing is preparing for a protracted trade war with the U.S.

Japanese shares ended largely unchanged after the New York Times reported that the Trump administration is considering placing limits to Chinese video surveillance firm Hikvision’s ability to buy U.S. technology.

Investors also reacted to mixed economic data and comments by Bank of Japan board member Yutaka Harada that monetary easing should be strengthened further without delay.

Japanese exports fell for a fifth straight month in April, in a sign of weakness in external demand. On the positive side, the country’s core private-sector machinery orders rose for the second straight month.

The Nikkei average edged up 10.92 points to 21,283.37 while the broader Topix index closed 0.26 percent lower at 1,546.21.

Exporters such as Canon, Sony and Panasonic closed lower despite a weaker yen. Index heavyweights Softbank and Fanuc slid around half a percent while Fast Retailing rose 1 percent.

Australian shares inched higher even as overall gains remained limited amid fears that a protracted trade war between the United States and China could harm demand for Australian productions.

The benchmark S&P/ASX 200 index rose 10.60 points or 0.16 percent to 6,510.70 while the broader All Ordinaries index ended up 13.70 points or 0.21 percent at 6,598.10.

Banks ended flat to slightly lower after the country’s financial regulator said it may impose additional capital requirements on some financial institutions. Westpac Banking Corp shares climbed 1.1 percent.

Mining heavyweights BHP and Rio Tinto eked out modest gains amid record higher iron ore prices. Smaller rival Fortescue Metals Group slumped over 8 percent on going ex-dividend.

Gold miner Evolution Mining dropped 2.4 percent and Northern Star declined 1.9 percent as gold prices held near two-week low.

Construction materials supplier James Hardie rallied 2.2 percent as Australia’s prudential regulator eased lending criteria for home loans.

Seoul stocks recovered from an early slide to end modestly higher for the day. The Kospi average rose 3.61 points or 0.18 percent to 2,064.86.

New Zealand shares inched higher, with the benchmark S&P/NZX 50 index ending up 21.39 points or 0.21 percent at 10,237.48.

The total volume of retail sales in New Zealand rose a seasonally adjusted 0.7 percent sequentially in the first three months of 2019, Statistics New Zealand said in a report today.

That exceeded forecasts for a rise of 0.6 percent following the 1.7 percent jump in the three months prior.

U.S. stocks rose overnight, with tech shares leading the surge after the Commerce Department temporarily eased trade restrictions on Chinese tech giant Huawei and Google said it would continue to work with Huawei over the next 90 days.

The Dow Jones Industrial Average climbed 0.8 percent, the Nasdaq Composite advanced 1.1 percent and the S&P 50 added 0.9 percent.

Global markets are rallying after Trump tempers his Huawei ban after ‘big reality check’

  • Asian and European stocks and US futures rose on Tuesday after Trump tempered his Huawei ban.
  • The Chinese telecoms giant can buy US products to maintain its networks and release software updates, but it can’t buy American components for new devices.
  • “This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are,” said Jasper Lawler, head of research at London Capital Group.

Asian and European stocks and US futures rose on Tuesday after US President Donald Trump tempered his Huawei ban, permitting US companies to do business with the Chinese telecoms titan for another three months.

Huawei’s blacklisting hammered US companies that trade with it or rely on its services or equipment. For example, shares in chipmakers Qualcomm, Broadcom, Micron Technology, and Nvidia fell by more than 3% on Monday, sending the tech-heavy Nasdaq index down 1.5%.

In response to the fallout, the US Commerce Department has granted Huawei a temporary license to buy US products to maintain its networks and release software updates for existing smartphones and tablets. However, Huawei is still banned from buying American components to manufacture new devices.

“This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are,” said Jasper Lawler, head of research at London Capital Group. “Yesterday was a big reality check for Trump and shows the incomplete information available for his decision.”

The Huawei ban came after Trump accused China of sabotaging a prospective trade deal, hiked tariffs on $200 billion worth of Chinese goods, and threatened to extend tariffs to a further $300 billion worth. China retaliated with higher tariffs on $60 billion worth of US goods, starting in June.

“Whether it’s Huawei or tariffs, I would see all of this in the broader context of giant tug-of-war between the two superpowers being played out in front our eyes,” said Neil Wilson, chief market analyst for Markets.com. “As such, the more this goes on the lower the chance of a meaningful resolution to any of it.”

Here’s the market roundup as of 9.50 a.m. (4.50 a.m.):

Asian indexes regained ground. The Shanghai Composite climbed 1.2%, the SZSE Component jumped 1.9%, and Hong Kong’s Hang Seng rose 1.3%.

European equities opened higher with Germany’s DAX up 0.6%, Britain’s FTSE 100 up 0.5%, and the Euro Stoxx 50 up 0.4%.

US stocks are set to open higher. The futures underlying the Dow Jones Industrial Average and S&P 500 rose 0.2%, while Nasdaq futures climbed 0.4%.

Asian Markets Mixed After Huawei Wins Temporary Reprieve

Asian stock markets closed mixed on Tuesday, with some of the markets recovering from early losses after the U.S. Commerce Department temporarily eased some restrictions imposed on Chinese telecom giant Huawei Technologies in order to minimize disruption for its customers. The temporary reprieve will be in effect for 90 days.

China’s Shanghai Composite Index added 35.36 points or 1.23 percent to close at 2,905.97, while Hong Kong’s Hang Seng Index fell 149.75 points or 0.54 percent to settle at 27,637.86.

The Japanese market closed lower amid worries about escalating U.S.-China trade tensions after the U.S. blacklisting of Huawei. However, the market pared initial losses following news that the U.S. has temporarily eased trade restrictions on Huawei.

The benchmark Nikkei 225 Index declined 29.28 points or 0.14 percent to close at 21,272.45, after falling to a low of 21,160.43 earlier.

Shares of SoftBank Group gained 3.5 percent after U.S. wireless telecom carriers T-Mobile and Sprint received support from FCC chairman Ajit Pai for their $26 billion merger. SoftBank is the majority owner of Sprint shares.

Shares of suppliers to Huawei fell on worries about the blacklisting of the Chinese telecom giant. Tokyo Electron lost almost 2 percent, Murata Manufacturing Co. declined more than 1 percent and Taiyo Yuden dipped 0.6 percent.

The major exporters closed mixed. Sony lost more than 4 percent and Mitsubishi Electric fell almost 2 percent, while Canon rose more than 1 percent and Panasonic added almost 1 percent.

In the auto space, Honda edged up 0.1 percent, while Toyota dipped 0.5 percent.

Among the major banks, Mitsubishi UFJ Financial added 0.7 percent while Sumitomo Mitsui Financial declined 0.4 percent. In the oil sector, Inpex fell 2.7 percent, while Japan Petroleum advanced more than 1 percent.

The Australian market closed higher for a fifth straight day, setting a fresh eleven-and-a-half year high.

The benchmark S&P/ASX 200 Index added 24.00 points or 0.37 percent to close at 6,500.10. The broader All Ordinaries Index rose 19.70 points or 0.30 percent to settle at 6,584.40.

The big four banks rose after the prudential regulator APRA proposed dropping the requirements for banks to use a minimum 7 percent interest rate to assess customers’ ability to meet their mortgage repayments.

Westpac advanced almost 3 percent, while ANZ Banking and Commonwealth Bank gained slightly more than 2 percent each. National Australia Bank added more than 1 percent.

ANZ said it has appointed Ken Adams, who has been a senior partner at Herbert Smith Freehills, as its top lawyer to replace Bob Santamaria, who is retiring.

In the tech space, Afterpay Touch Group fell almost 5 percent, WiseTech Global lost more than 1 percent and Altium declined more than 2 percent.

Among the major miners, Fortescue Metals fell more than 2 percent, Rio Tinto lost more than 1 percent, and BHP Group declined 0.7 percent.

Oil stocks also edged lower despite an increase in crude oil prices overnight. Oil Search declined 0.1 percent and Woodside Petroleum dipped less than 0.1 percent.

James Hardie Industries reported a 57 percent surge in full-year profit on higher revenues, but cut its final dividend. The construction materials company’s shares gained almost 4 percent.

OFX Group reported a 12 percent increase in its full-year underlying profit, while net profit declined 5.8 percent. The foreign exchange provider’s shares jumped almost 17 percent.

South Korean stocks closed modestly higher. The benchmark Korea Composite Stock Price Index or KOSPI added 5.54 points or 0.27 percent to settle at 2,061.25.

Shares of Samsung Electronics gained 2.7 percent as investors bet that the issues surrounding China’s Huawei could provide a boost to the South Korean conglomerate.

Elsewhere in Asia, Indonesia and Taiwan also closed higher, while New Zealand, Singapore and Malaysia closed lower.

U.S. stocks closed lower on Monday, led by tech stocks, amid ongoing concerns about the escalating U.S.-China trade dispute after Google suspended some of its business with Chinese tech giant Huawei. Google has cut Huawei off from business involving the transfer of hardware, software and technical services, complying with an order by President Donald Trump blocking the sale or transfer of U.S. technology to Huawei.

The Nasdaq plunged 113.91 points or 1.5 percent to 7,702.38, while the Dow fell 84.10 points or 0.3 percent to 25,679.90 and the S&P 500 slid 19.30 points or 0.7 percent to 2,840.23.