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Asian Shares Broadly Higher As Trade War Worries Ease

Asian stocks ended broadly higher on Monday after the U.S. and China agreed to put the trade war on hold and set up a framework for addressing trade imbalances in the future.

ASIA - Mon May 21, 2018

Chinese stocks rose after the U.S. and China made meaningful progress in two days of high-level talks. The benchmark Shanghai Composite index gained 20.54 points or 0.64 percent to finish at 3,213.84 while Hong Kong's Hang Seng index ended up 0.6 percent at 31,234.35.

A weaker yen and solid trade balance data helped lift Japanese shares, with the Nikkei average closing up 72.01 points or 0.31 percent at 23, 002.37, extending gains for the third consecutive session. The broader Topix index closed marginally lower at 1 813.75.

Japan posted a merchandise trade surplus of 625.977 billion yen in April, the Ministry of Finance said - up 30.9 percent on year. The headline figure exceeded expectations for a surplus of 440.0 billion yen following the downwardly revised 797.0 billion yen surplus in March (originally 797.3 billion yen).

Exporters closed modestly lower despite the yen falling to more than a 4-month low of 111.37 against the greenback. Advantest lost 4.1 percent, Sompo Holdings fell as much as 6.9 percent and MS&AD Insurance Group shed 4 percent.

Australian shares ended little changed with a negative bias, dragged down by financials and material stocks. The benchmark S&P/ASX 200 and the broader All Ordinaries index both closed marginally lower at 6,084.50 and 6,190.20, respectively.

Banks followed their U.S. peers lower, with Commonwealth, NAB and Westpac ending down between 0.6 percent and 0.7 percent.

Mining heavyweights BHP Billiton and Rio Tinto dropped 0.4 percent and 0.9 percent, respectively amid declining iron ore prices.

Energy stocks surged higher, with Santos climbing 1.8 percent after it received an improved $US10.84 billion ($14.4 billion) offer from Harbour Energy. AGL Energy rose 1.1 percent after it rejected Alinta Energy's A$250 million offer to buy Liddel Power Station.

Vocus Group slumped 4.2 percent after the company named former Optus boss Kevin Russell as managing director and chief executive, three months after Geoff Horth resigned.

Seoul stocks ended higher as an economic truce between the U.S. and China eased fears of a trade war. The benchmark Kospi inched up 4.92 points or 0.20 percent to 2,465.57.

Market heavyweight Samsung Electronics rose about 1 percent while chipmaker SK Hynix rallied 1.4 percent. LG Display and LG Chem fell over 1 percent as Group Chairman Koo Bon-moo passed away after fighting brain disease since 2017.

New Zealand shares fell, led down by consumer staple and healthcare stocks. The benchmark S&P/NZX 50 index dropped 41.61 points or 0.48 percent to 8,615.72. Comvita shares slumped 8 percent after the products company pulled out of takeover talks. Dairy firm a2 Milk Company lost 2.3 percent.

The total volume of retail sales in New Zealand added a seasonally adjusted 0.1 percent sequentially in the first three months of 2018, Statistics New Zealand said today. That was shy of expectations for a gain of 1.0 percent and down from the downwardly revised 1.4 percent in the previous three months.

India's Sensex was down about half a percent as investors fretted about possible larger opposition unity in the 2019 that could spoil Prime Minister Narendra Modi's bid for a second term.

Indonesia's Jakarta Composite index was declining 0.6 percent, while Malaysia's KLSE Composite index was up 0.1 percent, Singapore's Straits Times index was rising 0.6 percent and the Taiwan Weighted advanced 1.3 percent.

U.S stocks closed mostly lower on Friday as traders remained focused on the second round of trade talks between the U.S. and China. The tech-heavy Nasdaq Composite shed 0.4 percent and the S&P 500 slid 0.3 percent while the Dow inched up marginally.

by BakinvNews Staff Writer

editorial@bakinv.com

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