Asia report: Most markets higher as oil rises on Gulf tensions

Markets in Asia finished mostly higher on Monday, as oil prices continued to head north amid ongoing tensions between the United States and Iran.

In Japan, the Nikkei 225 was up 0.13% at 21,285.99, as the yen strengthened 0.04% against the dollar to last trade at JPY 107.28.

Of the major components on the Tokyo benchmark, automation specialist Fanuc was up 0.4%, fashion firm Fast Retailing added 0.65%, and technology conglomerate SoftBank Group was 0.54% firmer.

The broader Topix index was up 0.12% to finish its trading day at 1,547.74.

On the mainland, the Shanghai Composite added 0.21% to 3,008.15, and the smaller, technology-heavy Shenzhen Composite slipped 0.09% to 1,576.09.

South Korea’s Kospi eked out gains of 0.03% to 2,126.33, while the Hang Seng Index in Hong Kong added 0.14% to 28.513.00.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics down 0.44%, while chipmaker SK Hynix rose 1.52%.

Investors in the region were keeping one eye on the upcoming G20 summit in Japan, where US president Donald Trump and his Chinese counterpart Xi Jinping are set to meet, in a bid to resolve their ongoing trade dispute.

At the same time, concerns were still lingering in the Middle East, after Washington and Tehran came within inches of a full-blown military conflict last week.

The US claimed Iran had shot down one of its spy drones in the region, following accusations the Islamic Republic had also attacked two oil tankers in the Gulf of Oman.

That led to president Trump approving a series of missile strikes on Iran, before cancelling that order just as ships and aircraft were moving into position.

Over the weekend, Donald Trump told US media that the White House was prepared to negotiate with Iran, saying he was not seeking war with the country, before warning of “obliteration” if it did come to that.

That conflict led to rising oil prices as the region went to bed, with Brent crude last up 0.02% at $65.21 per barrel, and West Texas Intermediate adding 0.78% to $57.88.

“In the dirt of major economic news, the investors’ attention shifts to the political agenda at the start of the week,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

“Besides the Iranian tensions, the upcoming G20 meeting brings the trade war between the US and China back on the table.

“While Trump and Xi are expected to meet at this week’s summit in Osaka, the chances of a trade deal between the two countries remain slim.”

In Australia, the S&P/ASX 200 advanced 0.22% to 6,665.40, as investors digested the minutes of the central bank’s June monetary policy meeting.

The Reserve Bank of Australia governor Philip Lowe suggested questioning how effective easing would be to boost economic growth on a global scale would be appropriate.

Those comments came even as the bank said in its minutes that further easing was “more likely than not”, after it cut its official cash rate by 25 basis points to 1.25%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 0.6% at 10,338.31, led higher by medical equipment maker Fisher & Paykel Healthcare, which was 2.7% higher.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.32% at AUD 1.4392, and the Kiwi advancing 0.26% to NZD 1.5138.