Asian Shares Mostly Higher As Trade Tensions Ease

Asian stocks ended mostly higher on Monday after the U.S. and China agreed to restart trade talks and decided not to impose additional tariffs on each other’s products.

U.S. President Donald Trump agreed to put off imposing additional tariffs on Chinese goods indefinitely while also removing some curbs on Huawei Technologies Co. buying high-tech equipment from the U.S.

In response, China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.

Chinese shares rallied after China said it would soften or lift restrictions on foreign investment in new sectors. The benchmark Shanghai Composite Index jumped 66.02 points or 2.2 percent to 3,044.90, although Hong Kong’s Hang Seng Index ended down 78.80 points or 0.3 percent at 28,542.62.

Investors shrugged off data showing that Chinese manufacturing activity contracted for the first time in four months in June.

The Caixin manufacturing PMI dropped to 49.4 from 50.2 in May as trade tensions caused renewed declines in total sales, export orders and production.

Japanese shares hit a two-month high as the safe-haven yen slid on improved risk sentiment and tech shares gained ground on an easing of restrictions on Huawei. The Nikkei 225 Index soared 454.05 points or 2.1 percent to 21,729.97 ,while the broader Topix finished 2.2 percent higher at 1,584.85.

Chip-related shares surged, with Sumco, Tokyo Electron, Advantest and TDK Corp. spiking 3-7 percent. Companies with significant exposure to China also gained ground. Murata Manufacturing rallied 5 percent and Yaskawa Electric advanced 5.3 percent.

On the other hand, resin products maker JSR Corp lost 2 percent after Japan’s trade ministry said it would tighten restrictions on exports of some tech materials to South Korea, including polyimides used in flexible displays.

Australian markets closed modestly higher as trade tensions eased and investors awaited the Reserve Bank of Australia’s interest rate decision on Tuesday.

The benchmark S&P/ASX 200 Index rose 29.30 points or 0.4 percent to 6,648.10, while the broader All Ordinaries Index ended down 32.20 points or 0.5 percent at 6,731.40.

Miners surged, with BHP, Rio Tinto and Fortescue Metals rising between 1 percent and 1.4 percent. Healthcare stocks such as CSL, Cochlear and Resmed gained between 0.7 percent and 2 percent.

Banks ended on a mixed note amid expectations the Reserve Bank will set a new record low cash rate of 1 percent at its monthly meeting tomorrow.

Nine Entertainment Co. rallied 3.2 percent after saying it had completed the A$115 million sale of its regional and community newspaper division to former Fairfax executive Antony Catalano and Thorney Investment Group.

Seoul stocks gave up early gains to end marginally lower as weak factory activity data from China overshadowed the weekend truce in the U.S.-China trade war.

Japan’s announcement of stricter export rules for high-tech materials to South Korea further undermined investor sentiment. The Kospi edged down 0.88 points or less than a tenth of a percent to 2,129.74.

New Zealand shares fell slightly, dragged down by dual-listed banks. The benchmark S&P/NZX 50 Index dropped 36.57 points or 0.4 percent to 10,464.53 after ending at a record high on Friday.

U.S. stocks rose on Friday as investors looked ahead to the Trump-Xi meeting and all 18 of the largest banks in the U.S. cleared the Fed’s final stress test.

The Dow edged up 0.3 percent, the tech-heavy Nasdaq Composite gained half a percent and the S&P 500 added 0.6 percent.

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