Asian Shares Rise Despite Trump’s Tariff Threat

Asian stocks rose broadly on Tuesday despite U.S. President Donald Trump threatening to slap huge new tariffs on China if his counterpart Xi Jinping doesn’t attend the upcoming G20 meeting.

Chinese stocks rallied after Beijing said it would allow local governments to use proceeds from special bonds as capital for major projects including highways, gas and power supply and railways.

The benchmark Shanghai Composite index jumped 73.59 points or 2.58 percent to 2,925.72. Hong Kong’s Hang Seng index ended up 0.76 percent at 27,789.34.

Japanese shares recovered from a weak start to finish higher as the yen’s retreat against the dollar helped lift exporters.

The Nikkei average rose 69.86 points or 0.33 percent to 21,204.28 while the broader Topix index closed 0.54 percent higher at 1,561.32.

Exporters Canon, Toyota Motor, TDK Corp and Tokyo Electron gained 1-2 percent. Renesas Electronics soared jumped 4.4 percent after it opened a laboratory in Shanghai jointly with a local affiliate of Germany’s Volkswagen group.

Higher U.S. yields boosted financials, with banks Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial all ending up over 1 percent.

Australian markets posted strong gains as traders returned to their desks following a long weekend.

The benchmark S&P/ASX 200 index jumped 102.40 points or 1.59 percent to 6,546.30, extending gains for a fifth straight session amid easing trade tensions between the United States and Mexico. The broader All Ordinaries index ended up 99.20 points or 1.52 percent at 6,624.40.

Miners BHP, Rio Tinto and Fortescue Metals Group climbed 2-3 percent after a jump in China’s iron ore prices.

The big four banks rose around 1 percent to extend recent gains after last week’s central bank rate cut.

Woodside Petroleum, Santos, Origin Energy and Oil Search rallied 1-2 percent despite a decline in crude oil prices overnight.

Gold miner Northern Star tumbled 4.2 percent and Evolution Mining dropped 2 percent after gold prices snapped an eight-session winning streak to close lower overnight.

Star Entertainment Group slumped 15.7 percent. The casino operator said it expects full-year earnings to be lower than last year.

On the data front, Australia’s business confidence strengthened in May after the Federal election, while conditions weakened signaling that the private sector continues to lose momentum, survey data from National Australia Bank showed.

The business confidence index advanced to 7 points in May from zero a month ago, However, it is unlikely to persist at these levels given the weakness in other forward looking indicators, NAB said.

Meanwhile, the business conditions index fell 2 points to +1 in May, largely driven by declines in profitability and trading sub-components.

Seoul stocks rose, tracking strong gains in Chinese markets after China said it would ease restrictions on local governments’ borrowing for major infrastructure investments to spur growth in the world’s second-largest economy. The benchmark Kospi gained 12.32 points or 0.59 percent to 2,111.81.

New Zealand shares rallied, with the benchmark S&P/NZX 50 index ending up as much as 111.54 points or 1.11 percent at 10,139.15 after the U.S. put off imposing tariffs on Mexican goods. Dairy products maker a2 Milk Company led the market higher to end up by 3.2 percent.

Malaysia’s KLSE Composite index was down 0.3 percent. Malaysia’s industrial production rose 4.0 percent year-on-year in April, following a 3.1 percent increase in March, a government report showed. Economists had expected a growth of 2.5 percent.

U.S. stocks rose overnight after the U.S. reached an agreement with Mexico on tariffs. The Dow Jones Industrial Average rose 0.3 percent to extend gains for a sixth straight session and the S&P 500 gained half a percent while the tech-heavy Nasdaq Composite surged 1.1 percent.

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