HONG KONG, China (AFP) — Seoul’s Kospi was among the best performers Friday and the won strengthened as the leaders of North and South Korea began a historic summit, while other Asian markets also enjoyed gains following a US rally.
After fluctuating through the week, regional stocks were on course for a positive finish as Kim Jong Un and Moon Jae-in met on the border of the rival countries for talks expected to touch on Pyongyang’s nuclear program.
Kim said he was “determined to send a starting signal at the threshold of a new history,” while Moon said he was hoping for “a bold agreement so that we may give a big gift to the whole Korean people and the people who want peace.”
With hopes for a positive outcome from the meeting — the first between the countries’ two leaders since 2007 — Seoul stocks rose 0.6 percent in early trade, while the won climbed 0.3 percent against the dollar.
“Of course we should always be on guard for a negative development… but as far as we can tell from the recent remarks by North Korea, the summit will be reconciliatory,” Makoto Sengoku, market analyst at Tokai Tokyo Research Institute, told AFP.
The upbeat mood from the meeting coincided with a much-needed rally across US markets thanks to another round of healthy corporate earnings.
Technology firms enjoyed a much-needed lift after Facebook posted a 63 percent rise in first-quarter profit, undented by a consumer data scandal.
The social media giant’s shares soared 9.1 percent while other tech titans also climbed, with Amazon, Google parent Alphabet and Microsoft all up around two percent or more.
Euro struggles
“Not surprisingly, earnings season continues to dominate the equity landscape as investors revel in the fantastic profit results and confirming a three percent ten-year (Treasury) yield is of little concern to the markets,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
US Treasury yields this week broke the three percent mark for the first time in four years, raising concerns about a sharp hike in Federal Reserve borrowing costs.
While Asian tech companies struggled to follow suit — with dealers fretting over the slowing demand in the lucrative smartphone sector — most regional stock markets were higher.
Tokyo gained 0.4 percent by the break, while Hong Kong added 0.7 percent, Shanghai climbed 0.2 percent, Sydney climbed 0.4 percent and Singapore was 0.2 percent up.
On currency markets the dollar held on to its gains against the euro, which sank on Thursday after the European Central Bank held off winding down its crisis-era stimulus and warned about the potential fallout from any possible China-US trade war.
Energy companies firmed on the back of another rise in oil prices, which are at highs not seen since late 2014.
“Oil prices continue to rise as investors are waking up to the reality of global demand dynamics, suggesting we’re in the midst of shifting from a supply overload to a shortage of crude in the years ahead,” Innes added.
“Trade wars are on the back burner, and geopolitical risk is unlikely to abate, so the path of least resistance should be higher for the foreseeable future.”
Key figures around 0230 GMT
Seoul – Kospi: UP 0.6 percent at 2,489.78
Tokyo – Nikkei 225: UP 0.4 percent at 22,413.85 (break)
Hong Kong – Hang Seng: UP 0.7 percent at 30,204.36
Shanghai – Composite: UP 0.2 percent at 3,080.12
Dollar/Korean won: DOWN at 1,077.00 won from 1,080.56 won
Euro/dollar: DOWN at $1.2101 from $1.2104 at 2100 GMT
Dollar/yen: DOWN at 109.31 yen from 109.34
Pound/dollar: DOWN at $1.3917 from $1.3918
Oil – West Texas Intermediate: DOWN 11 cents at $68.08 per barrel
Oil – Brent North Sea: DOWN 11 cents at $74.63 per barrel
New York – Dow: UP 1.0 percent at 24,322.34 (close)
London – FTSE 100: UP 0.6 percent at 7,421.43 (close)
© Agence France-Presse