Asian stocks react cautiously to China–US, UK trade hopes

Shares were mixed in Asia on Friday, 9 May, as investors pinned their hopes on weekend trade talks between China and the US.

US futures and oil prices logged modest gains.

China reported that its exports rose at a faster-than-expected 8.1 per cent annual pace in April, down from 12.4 per cent the month before. Exports to the United States dropped more than 20 per cent, however, as President Donald Trump's increases took effect.

Hong Kong's Hang Seng slipped 0.1 per cent to 22,777.82, while the Shanghai Composite Index lost 0.3 per cent to 3,343.38.

Top US and Chinese trade officials are due to meet on Saturday, 10 May, in Geneva, Switzerland.

Asked on Thursday whether he would consider lowering tariffs on Chinese imports if this weekend's talks go well, Trump said, “It could be. We're going to see. Right now, you can't get any higher. It's at 145 per cent. So we know it's coming down.” He also said he expects the talks in Switzerland to be “substantive.”

Tokyo's Nikkei 225 jumped 1.5 per cent to 37,493.65, while the Kospi in Seoul was almost unchanged at 2,578.64.

Australia's S&P/ASX 200 added 0.4 per cent to 8,228.10.

Taiwan's Taiex surged 1.7 per cent.

US stocks rose Thursday after the United States and United Kingdom announced a deal on trade that would lower some tariffs between the two countries, the first of what Wall Street hopes will be enough agreements to keep a recession from hitting the economy.

The S&P 500 climbed 0.6 per cent to 5,663.94 for its 11th gain in the last 13 days. The Dow Jones Industrial Average added 0.6 per cent to 41,368.45, and the Nasdaq composite rose 1.1 per cent to 17,928.14.

Trump lauded what he called a “maxed-out trade deal” with the United Kingdom, which will keep 10 per cent tariffs on UK products but lower taxes on UK automobiles in exchange for greater access in the U.K. market for U.S. beef, ethanol and other products.

Besides hopes for deals on trade, strong profit reports from US companies also have helped to drive the S&P 500 to within 7.8 per cent of its all-time high set in February after it dropped nearly 20 per cent below the mark a month ago.

Axon Enterprise, the company that sells Tasers, body cameras and other public safety equipment, jumped 14.1 per cent after joining the list. It benefited from strong growth for its software and services, and it raised its forecast for revenue over the full year.

Tapestry rose 3.7 per cent after the company behind the Coach and Kate Spade brands also reported better profit and revenue than expected. It credited new, younger customers in North America, among other things.

Molson Coors, though, described a different landscape when it released its latest quarterly results, which fell short of analysts' expectations. Its stock fell 4.5 per cent.

Krispy Kreme tumbled 24.7 per cent after withdrawing its forecasts for the full year. The doughnut seller said it made the move in part because of “macroeconomic softness” and because it's pausing the rollout of sales of its doughnuts at more McDonald's restaurants.

The US economy has remained okay so far, with the Federal Reserve saying Wednesday, 7 May, that it still looks to be running at a solid rate underneath the surface. But pessimism has soured sharply among U.S. households because of tariffs, and the fear is that all the uncertainty created by them could be enough to force the economy into a recession.

A couple reports on the economy Thursday came in mixed. One said slightly fewer US workers applied for unemployment benefits last week. But another said productivity for US workers slowed by more than economists expected at the start of the year.

In other dealings early Friday, US benchmark crude oil gained 26 cents to $60.17 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, added 29 cents to $63.13 per barrel.

The US dollar fell to 145.66 Japanese yen from 145.91 yen. The euro rose to $1.1228 from $1.1220.