Asian stocks surge despite trade tensions after US gains
BEIJING (AP) — Asian stock markets surged Tuesday despite U.S.-Chinese trade tensions after Wall Street posted its strongest gains in a week
KEEPING SCORE: Tokyo’s Nikkei 225 index jumped 2.1 percent to 21,490.45 while Hong Kong’s Hang Seng gained 1.3 percent to 30,261.45. Seoul’s Kospi advanced 1.4 percent to 2,408.91 and Sydney’s S&P-ASX 200 added 1.2 percent to 5,966.40. The Shanghai Composite Index shed 0.2 percent to 3,250.23. Benchmarks in New Zealand, Taiwan and Singapore rose while Malaysia and the Philippines declined.
TRADE TENSIONS: Trump took to Twitter to defend his plan to raise tariffs on imported steel and aluminum, which have riled trading partners and already sparked talk of possible retaliation. Trump highlighted trade deficits with Canada and Mexico, and he said tariffs “will only come off if” the three countries sign a new free-trade agreement. Later in the day, House Speaker Paul Ryan’s office issued a statement saying he is “extremely worried” about the consequences of a global trade war and urged the White House “to not advance with this plan.”
WALL STREET: Markets rebounded from morning losses to post their best day in a week, highlighting the uncertainty surrounding Trump’s tariffs plans and possible foreign reaction. Boeing Co., which makes the bulk of its sales outside the United States, fell 2.3 percent in the morning before rebounding to end up 2.3 percent. The Standard & Poor’s 500 index finished up 1.1 percent at 2,720.94. The Dow Jones industrial average jumped 1.4 percent to 24,874.76. The Nasdaq composite gained 1 percent to 7,330.70.
ANALYST’S TAKE: “Little if any light was shone on the trade war situation last night but buyers pulled the trigger anyway,” said Ric Spooner of CMC Markets in a report. “The current rally is likely to be capped until investors get more evidence on a couple of fronts,” said Spooner. “First, there remains potential for more news on world tariffs. Second, markets may breathe a little easier, if Friday’s U.S. wage growth data does not exceed expectations.”
U.S. JOBS: Markets are looking ahead to Friday’s release of U.S. employment data. The consensus forecast is for the number of new jobs created last month to hold steady at 200,000 with hourly earnings up 0.2 percent. “Hourly earnings probably slowed a little after a weather-related boost; we believe the trend is up, however,” said Jim O’Sullivan of High Frequency Economics in a report.
ENERGY: Benchmark U.S. crude gained 6 cents to $62.63 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.32 on Monday to $62.57. Brent crude, used to price international oils rose 7 cents to $65.61 in London. It advanced $1.17 on Monday to $62.57.
CURRENCY: The dollar gained to 106.42 yen from Monday’s 106.19 yen. The euro edged up to $1.2353 from $1.2337.