Market Update: Asian Stocks Follow Wall Street Higher as Trade, Geopolitics in Focus
Asian stocks surged on Monday, as traders took in better than expected U.S. jobs data and confirmation from President Trump that a planned summit with North Korea will go on as expected.
All the major indexes in the Asia-Pacific region put up firm gains on Monday, with Japan’s Nikkei 225 gaining 1.3%. With the gains, the Nikkei virtually erased its month-on-month decline.
The Hang Seng Index, which trades in the Special Administrative Region of Hong Kong, jumped 1.2%. Mainland China’s CSI 300 Index gained 0.3%.
Down Under, Australia’s S&P/ASX 200 gained 0.7% on Monday.
Asian markets tracked huge gains on Wall Street Friday after U.S. nonfarm payrolls rose much faster than expected and unemployment fell to a new 18-year low.
U.S. stock futures were trading higher on Monday, with the Dow Jones mini contract gaining 49 points.
U.S.-North Korea Summit Back On
U.S. President Donald Trump confirmed Friday that his meeting with North Korea’s Kim Jong-un will go on as expected later this month. However, the president tempered expectations by stating that the June 12 summit will be a “getting to know you meeting” with few expectations.
The Trump administration welcomed a top aide to Kim Jong-un on Friday as the two sides tried to revive bilateral talks. Trump said the meeting is “going to be a process,” adding that “relationships are building and that’s a very positive thing.”
“They want it, we think it’s important, and I think we would be making a big mistake if we didn’t have it,” Trump told reporters Friday.
Trade War Escalates
Despite their strong start, shares in Japan, Australia and elsewhere could face pullback from an escalating trade war between the United States and its allies. The Trump administration last week said it would move ahead with steel and aluminum tariffs on Canada, Mexico and the United Kingdom. Canada announced swift countermeasures which it says will come into force next month.
Meanwhile, China has warned Washington it will withdraw from its commitment to buy more U.S. goods if the Trump administration imposes fresh tariffs on the Asian country.
The United States is currently locked in a prolonged trade dispute with Canada and Mexico over extending NAFTA.
Trade will be on the agenda at this week’s Group of Seven summit, which will be held in Canada. The host country, along with Japan and the EU have sent a message of “concern and disappointment” to the Trump administration about its protectionist policies.
Featured image courtesy of Shutterstock.