Asia report: Markets climb as trade tensions ease
Asian markets were buoyant on Monday as global trade tensions eased following Washington's decision not to impose tariffs on Mexican imports, while China reported unexpected export growth in May.
The two neighbours appeared to avoid risking a trade war after a breakthrough in negotiations on Friday, with Mexico agreeing to rapidly expand a controversial asylum programme and deploy security forces in a bid to control the flow of illegal Central American migrants seeking entrance into the US.
Craig Erlam, senior market analyst at Oanda, said: "The deal between the US and Mexico to avoid tariffs will naturally be helping to boost investor sentiment. While this wasn’t a tariff spat that had yet got underway, the risk was very real and could have escalated very quickly. Coming at a time when relations with China are already strained and massive tariffs have already been imposed, investors were understandably uneasy."
Elsewhere, data released earlier showed that Chinese exports from May increased 1.1% compared to the same month last year, despite the continued threat of US tariffs. Analysts had predicted a 3.8% drop.
Imports, however, had been expected to fall by 3.8% by analysts surveyed by Reuters but dropped even further by 8.5%.
Japan's Nikkei 225 was up 1.20% at 21,134.42 as newly released data showed that Japan’s economy grew at a slightly higher annualised rate than initially estimated, climbing by 2.2% compared to a median forecast of 2.1% growth from a Reuters poll.
Major index players Softbank and Sony booked 2.90% and 2.51% gains respectively, while the Japanese yen was down 0.32% against the US dollar at JPY108.54.
In China, the Shanghai Composite index was 0.86% higher at 2,852.13 and the tech-heavy Shenzhen Composite climbed 1.33% to 1,483.23 as Jinjian Cereals Industry, Changchun Sinoenergy Corp and Lanzhou LS Heavy Equipment all rose more than 10%.
Hong Kong's Hang Seng index jumped 2.27% to 27,578.64 amid strong gains from hotel and casino operator Galaxy Entertainment, which rose by 7.16%, lens manufacturer Sunny Optical, which increased by 6.81%, and CNOOC, which pushed up 4.93%.
The South Korean Kospi ended the day up 1.31% at 2,099.49, rising for a third consecutive session as semiconductor manufacturer SK Hynix increased by 2.14% following the launch of a new data research lab.
Brent Crude dropped by 0.06% to $63.25, while WTI Crude was 0.20% higher at $54.10
Down under, the Australian market was closed for a holiday, while New Zealand's S&P/NZX 50 was the lone faller among major markets in the region, dropping 0.20% lower to 10,027.61.
F&P Healthcare led the market lower as it dropped by 2.5%, while dairy firms A2 Milk and Fronterra were also lower, falling by 1.5% and 1.3% respectively.
Finally, the Australian dollar was 0.48% lower against the greenback at A$1.44, while New Zealand's dollar was 0.69% lower at NZ$1.51.