Asian markets gained in early trading Monday after the U.S. removed the threat of tariffs against Mexican imports on Friday and China released better-than-expected trade data for May.
Investors also appeared encouraged by a vow from G-20 finance officials Sunday to protect global trade despite rising tensions.
Japan’s Nikkei NIK, +1.20% surged 1.1% as revised data reaffirmed first-quarter GDP growth. Hong Kong’s Hang Seng Index HSI, +2.27% surged about 2% a day after hundreds of thousands of people filled the streets to protest a potential new extradition law with China, which many say encroaches on the rights of Hong Kong citizens. The Shanghai Composite SHCOMP, +0.86% rose 0.7% and the smaller-cap Shenzhen Composite 399106, +1.33% gained 0.9%..South Korea’s Kospi 180721, +1.31% advanced 0.9% and benchmark indexes in Taiwan Y9999, +1.51% , Singapore STI, +0.69% and Indonesia JAKIDX, +1.30% rose around 1% each. Australia’s S&P/ASX 200 was closed for a holiday.
Among individual stocks, SoftBank Group 9984, +2.90% rallied in Tokyo trading, with Toyota 7203, +1.79% and Sony 6758, +2.51% also rising. In Hong Kong, casino operator Galaxy Entertainment 27, +7.16% surged, as did Sunny Optical 2382, +6.81% and oil producer CNOOC 883, +4.93% . LG Electronics 066570, -0.51% fell in South Korea while SK Hynix 000660, +2.14% rose, and Taiwan Semiconductor 2330, +3.45% jumped in Taiwan.
China announced Monday that its exports grew 1.1% in May from a year earlier, trouncing expectations of a 3.8% decline by analysts polled by FactSet. But the country’s imports slid 8.5% from a year earlier, a far softer performance than predicted by analysts. Investors had expected both indicators to shrink given softening external conditions.
Stocks in Asia made early gains on news that President Donald Trump had suspended plans to impose tariffs on Mexico after the two countries arrived at an agreement on immigration.
The agreement with Mexico “appears to be a lower hanging fruit for the Trump administration,” Jingyi Pan of IG said in a commentary.
“The U.S.-China trade conflict meanwhile reckoned to remain an ongoing concern that looks have been caught in stalemate,” she added.
Over the weekend, financial leaders of the Group of 20 major economies met in Fukuoka, Japan, and pledged to protect global growth. They said in a joint communique that risks from trade and geopolitical tensions were “intensifying.”
The communique didn’t single out the tariffs battle between the U.S. and China, but leaders signaled separately that it was the No. 1 concern.
U.S. Treasury Secretary Steven Mnuchin met China’s central bank Gov. Yi Gang on the sidelines of the same gathering on Sunday. The two countries have concluded 11 rounds of trade talks with no agreement.
Mnuchin said on Twitter that the meeting was constructive and they had “candid discussion on trade issues.” He did not give further details.
On Friday, U.S. stocks capped off their best week since late November and reversed most of their losses in May. Traders took a lackluster jobs report as good news, as it was seen as increasing the odds of the Federal Reserve cutting interest rates in the coming months.
The benchmark S&P 500 index SPX, +1.05% rebounded 1.1% to 2,873.34 and the Dow Jones Industrial Average DJIA, +1.02% gained 1% to 25,983.94. The Nasdaq composite COMP, +1.66% climbed 1.7% to 7,742.10.
Benchmark U.S. crude CLN19, +0.22% gained 28 cents to $54.27 per barrel. The contract advanced $1.40 to $53.99 per barrel on Friday. Brent crude oil BRNQ19, -0.11% , the international standard, rose 22 cents to $63.51 a barrel. It added $1.62 to $63.29 per barrel in the previous session.
The dollar USDJPY, +0.38% rose to 108.48 Japanese yen from 108.17 yen late Friday.