Asia report: Markets higher after Pyongyang missile test

Markets in Asia were mostly in the green on Monday, following the lead of a positive Wall Street finish on Friday, with investors in the region shrugging off a North Korean missile test over the weekend and instead focussing on relatively positive economic data.

Japan’s Nikkei 225 was up 0.41% at 19,459.15, with investors looking for meaning in Prime Minister Shinzo Abe’s US visit and meeting with President Donald Trump at the weekend, as well as reacting to some positive economic data.

Exports and capital expenditure helped Japan’s economy expand for the fourth quarter in a row, with the year-on-year rate of growth declared as 1% for the quarter through December.

In Washington, Trump seemed to put his previously abrasive rhetoric on Japan to one side in his meeting with Abe, confirming his country’s “commitment to defend Japan through the full range of US military capabilities, both nuclear and conventional, is unwavering”.

Both Trump and his aides had previously accused Japan of taking advantage of US defence aid, and using the yen as a weapon to steal American jobs and productivity, in remarks that would have left even the most flexible economist scratching their head.

The yen was weaker against the greenback, last retreating 0.45% to JPY 113.73 per $1.

On the mainland, the Shanghai Composite was up 0.64% at 3,217.22, while the Shenzhen Composite added 0.75% to 1,964.75.

South Korea’s Kospi spent much of the session bobbing above and below the waterline, finally settling up 0.17% at 2,078.65, with local investors not showing any consensus on how to react to Pyongyang’s missile test.

The secretive country fired a ballistic missile into the sea on Sunday morning, with Pyongyang claiming the test was successful early on Monday, adding that the missile was capable of carrying a nuclear weapon.

In Seoul, the finance ministry reaffirmed its vow to act quickly should markets turn volatile in the wake of any weapons testing north of the demilitarised zone.

Chief of the Samsung Group, Jay Lee, was summoned back to speak with special prosecutors over bribery charges, as part of the huge cash-for-influence scandal surrounding impeached President Park Geun-hye.

Lee was held by prosecutors for just under 24 hours in January, though a special court rejected an application for an arrest warrant.

Samsung C&T fell 1.57%, while Samsung Electronics was off 1.04% and Samsung Engineering was 3.5% softer on the news.

In Hong Kong, the Hang Seng Index was 0.58% firmer at 23,710.98.

Oil prices were lower during Asian trading, with Brent crude down 0.6% at $56.36 per barrel and West Texas Intermediate also 0.6% lower at $53.54.

Australia’s S&P/ASX 200 was 0.7% higher at the close, at 5,760.69, with the energy and materials subindexes underpinning that strength, adding 1.44% and 2.24% respectively.

Regional financial institution, Bendigo and Adelaide Bank, plunged 4.83% however, after it reported a minuscule 0.1% rise in net profit after tax from ordinary activities in its first half.

Across the Tasman Sea, the S&P/NZX 50 added 0.4% to 7,135.50, with energy generator, wholesaler and retailer Contact Energy adding 1.7% after posting a 12% rise in first-half underlying profit to NZD 82m.

Both of the down under dollars were weaker against the greenback, with the Aussie last falling 0.02% behind to AUD 1.3028 and the Kiwi off 0.09% to NZD 1.3900 per $1.