Asian markets gained in early trading Monday as President Donald Trump’s response Friday to China’s new law reining in Hong Kong was not as bad as feared.
Japan’s Nikkei NIK, +0.34% rose 1% and Hong Kong’s Hang Seng Index HSI, +3.32% jumped 3.3%. The Shanghai Composite SHCOMP, +2.15% gained 2% while the Shenzhen Composite 399106, +3.05% surged 2.8%. South Korea’s Kospi 180721, +1.33% advanced 1.2% while benchmark indexes in Taiwan Y9999, +1.24% and Singapore STI, +2.17% rose more than 1%. Australia’s S&P/ASX 200 XJO, +0.51% rose 0.9%.
U.S. stock indexes ended mostly higher Friday and booked sharp gains for the week and month. Trump on Friday announced a series of actions against China.
“As expected, the president withdrew Hong Kong’s special status over the new China imposed security law,” Jeffrey Halley, senior Asia-Pacific markets analyst at Oanda, wrote in a note Monday. “What he did not do, however, was withdraw from the U.S.-China phase-one trade agreement signed in January. Nor did he impose sanctions on Chinese officials or persons connected to the regime. The collective sigh of relief in Asia is palpable this morning.”
Data across Asia showed the effects of the coronavirus pandemic are lingering. Official data released Sunday showed China’s factory activity fell in May for a second straight month, though was still slightly in expansion territory. Meanwhile, South Korea reported Monday that exports plunged nearly 24% in May from the previous year due to weak demand. Manufacturing activity in Japan and Australia also contracted.
U.S. crude oil CLN20, -0.87% for delivery in July fell slightly in electronic trading on the New York Mercantile Exchange, while July Brent crude BRNN20, -0.05% , the international standard, was little changed.
The dollar USDJPY, -0.24% fell to 107.65 Japanese yen.