Asia Pacific markets trade higher taking cues from Wall Street

  • Asia Pacific markets mostly rose on Tuesday, following gains on Wall Street overnight as investors remain unfazed by China's retaliatory actions against the United States. 
  • Reports said China imposed sanctions on 11 U.S. citizens that included Senators Ted Cruz, Marco Rubio, Tom Cotton, Josh Hawley and Pat Toomey.
  • The move from Beijing followed after Washington last week said it will impose sanctions on 11 individuals including Hong Kong leader Carrie Lam for her role in overseeing and "implementing Beijing's policies of suppression of freedom and democratic processes."

Asia Pacific markets mostly rose on Tuesday, following gains on Wall Street overnight as investors remain unfazed by China's retaliatory actions against the United States. 

The Nikkei 225 advanced 1.62% and the Topix index was up 2.02% as the Japanese market returned to trading following a public holiday on Monday. 

South Korea's Kospi index gained 1.24% while Australia's benchmark ASX 200 advanced 0.96% where the heavily-weighted financials subindex rose 1.75%. 

The Hang Seng index in Hong Kong was up 2.13% and the new technology index rose 0.87%. 

Chinese mainland shares also rose: The Shanghai composite was up 0.51%, the Shenzhen component gained 0.98% and the Shenzhen composite added 0.67%. 

In economic news, Singapore's GDP contracted by 42.9% in the second quarter of 2020 compared to the previous quarter. That sent the Southeast Asian country into a technical recession as large parts of the economy were shut down in early April to slow the spread of coronavirus. 

Still, Singapore's Straits Times index was up 0.23%. 

The session in Asia followed Monday gains on Wall Street where the 30-stock Dow Jones Industrial Average rose about 350 points in regular trading, posting its seventh positive session in a row — its longest winning streak since September 2019. The S&P 500 gained 0.2%, sitting just 0.9% below its record high set in February. Meanwhile, the Nasdaq underperformed with a 0.4% loss as investors rotated out of some of the high-fliers.

Reports said China imposed sanctions on 11 U.S. citizens that included Senators Ted Cruz, Marco Rubio, Tom Cotton, Josh Hawley and Pat Toomey. The move from Beijing followed after Washington last week said it will impose sanctions on 11 individuals including Hong Kong leader Carrie Lam for her role in overseeing and "implementing Beijing's policies of suppression of freedom and democratic processes."

The U.S. lawmakers sanctioned by Beijing have been vocal critics of a new security law that China imposed on Hong Kong, strengthening its hold over the city. 

China's action on Monday "did little to shake risk sentiment, with any initial nervousness caused by the move quickly unwound," said Felicity Emmett from ANZ Research in a morning note. 

"More pertinent is the meeting at the end of the week between key US and Chinese trade officials on a progress report on the phase 1 trade deal, though here the strong sense is that the Trump administration won't want to jeopardise the deal this side of the election for fear of alienating the important mid-West farming constituency," Ray Attrill, head of foreign-exchange strategy at the National Australia Bank, added in a morning note. 

U.S. stock futures were flat in overnight trade on Monday ET.

The U.S. dollar index, which measures the greenback against a basket of its peers, traded at 93.548, coming off an earlier high around 93.719. The Japanese yen, also a safe-haven currency, changed hands at 105.99 against the dollar, weakening fractionally from levels near 105.30 in the previous week. 

Meanwhile, the Australian dollar rose 0.27% to $0.7168. 

Oil prices gained Tuesday during Asian trading hours. U.S. crude was up 0.67% at $42.22 per barrel while global benchmark Brent added 0.4% to $45.17. 

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