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The major Asia Pacific shares finished mostly higher last week, but gains were mixed due to the lack of fresh news over the U.S.-China trade deal, and low holiday trading volume. Traders remained optimistic about the trade agreement, but were still worried about the details in the pact, and when and where it would be signed.
For the week, Japan’s Nikkei 225 Index settled at 23837.72, up 21.09 or +0.09%. In South Korea, the KOSPI Index finished at 2204.21, up 0.03 or +0.00% and in Hong Kong, the Hang Seng Index closed at 28225.42, up 354.07 or 1.27%.
China’s Shanghai Index settled at 3005.04, up 0.10 or +0.00% and Australia’s S&P ASX 200 Index finished at 6821.70, up 5.40 or +0.08%.
Shanghai Composite Index Plunges then Recovers
Mainland Chinese stocks tumbled on Monday following the announcement that China will cut import tariffs on a wide range of goods. China’s finance ministry announced starting January 1, it will lower import tariffs on over 850 products ranging from frozen pork to some types of semiconductors.
“The move is not linked to U.S.-China trade tensions, instead it is seen as a combination of a need from China to lower costs on import necessities such as pork and medicine, while also aimed at showing a willingness to open its economy to the rest of the world,” Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, wrote in a note.
Despite starting out weaker, the Shanghai Composite Index was able to recover from its losses to finish marginally higher.
US-China Trade: Investors Optimistic, but Worried About Details
Market sentiment continued to be boosted last week by the mid-December announcement of Phase One of a U.S.-China trade deal. At the end of the week, the two economic powerhouses were in the midst of translating the deal, with the aim of signing it in early January.
In a regular press briefing on Thursday, the Chinese Commerce Ministry said China is in close touch with the U.S. on signing the initial trade pact. That came after U.S. President Donald Trump said Tuesday the deal is “getting done,” adding there will be a signing ceremony with Chinese leader Xi Jinping.
Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, sounded a little optimistic about the deal in a note on Thursday saying, “China has been lukewarm about the trade agreement, expressing less enthusiasm than the US but (Thursday’s) comments is the strongest confirmation to date that there will be no reneging on the deal.”