Asian markets closed higher on Tuesday, May 13, with the exception of the Hang Seng Index of the Hong Kong Stock Exchange, which snapped an eight-session winning streak. Japan’s Nikkei Index posted gains for the fourth consecutive session, supported by Wall Street’s gains of more than 3%, fueled by optimism about a deal with China.
The world’s two largest economies (the United States and China) announced an agreement last week, Monday, to temporarily halt their trade war by suspending tariffs imposed by both sides for 90 days. Under the agreement, China will reduce tariffs imposed on the United States from 125% to 10%, while the United States will reduce its tariffs on Chinese goods from 145% to 30%. In a related development, Bank of Japan Deputy Governor Uchida indicated that he expects wages and prices to continue rising, indicating that the bank remains determined not to raise interest rates in the coming period.
The Nikkei index closed the session at 38,183 points, its highest level since February 21, with gains of 1.43%, up 539 points. The Topix index of the Tokyo Stock Exchange rose about 1.10% today, closing at 2,772 points. Furukawa Electric and Mitsubishi Motors led the Nikkei gains, rising 13% and 8%, respectively.
Among the sectors listed on the Tokyo Stock Exchange, the shipping sector rose 5.1%, while the pharmaceutical sector rose 3.2%, as Trump moved to lower drug prices. Japan’s SoftBank Group posted a net profit of 517 billion yen ($3.49 billion) for the period between January and March of this year, supported by the strong performance of its stakes in the telecommunications sector and the rising valuation of its stakes in advanced startups.
In contrast, Japan’s Nissan Motor Co. announced, according to the Nikkei newspaper, that it will suspend operations at some domestic factories as part of its business restructuring efforts.
Chinese indices registered modest gains today, with the broader Chinese CSI300 index rising about 0.15% to close at 3,896 points, while the Shanghai Composite Index closed up 0.17% at 3,374 points.
Hong Kong’s Hang Seng Index, the main index for the Hong Kong Stock Exchange, fell about 1.95% today, closing at 23,091 points, with declines in optical technology company Sunny Optical TEC and telecommunications company BYD leading the index’s losses, with declines of more than 7%. Today’s modest gains in Chinese stocks and the decline in the Hang Seng Index, compared to the more than 3% gain in US stocks, stem from rising market concerns that Chinese policymakers will scale back the stimulus and spending increases expected before the agreement with Trump to support the economy, which markets consider necessary to address growth challenges. Meanwhile, the South Korean Kospi index rose by about 0.04% in today’s session, closing at 2,608 points.