Asia supermarkets rose on Monday as investor sentiment remained resilient despite growing concerns over the U.S.-China relationship, but Hong Kong divisions declined.
Australia’s benchmark ASX 200 was up 1.53%, with all sectors trading higher. In Japan, the Nikkei 225 forefinger rose 1.45% while the Topix index was up 1.25%. South Korea’s Kospi gained 0.62%.
Mainland Chinese allots traded mixed: The Shanghai composite gained 0.1%, the Shenzhen composite was down 0.1% and the Shenzhen component was down 0.18%.
In Hong Kong, the Stall Seng index was down 0.95%, extending Friday’s losses of more than 5%.
Asia Pacific markets worsened on Friday after China announced a new national security law, which, if implemented, would give Beijing more check over Hong Kong and may incite further pro-democracy protests in the city. The draft measure was announced as China’s Citizen People’s Congress (NPC) — the country’s parliament — kicked off its annual session and will last until May 28.
“Risk sentimentality proved resilient, on Friday night, to concerns about the fallout from China introducing national security legislation in Hong Kong. Shortcoming in Asian equities gave way to a flattish European session, and mild positivity in the US,” Hayden Dimes at ANZ Research said in a Monday morning note.
Oversight departments in Hong Kong rallied behind Beijing’s plans on Monday after thousands took to the streets to bitch over the weekend, Reuters reported. Security Chief John Lee said “terrorism” was growing in the city and activities that damage national security became more rampant, the news wire said.
Still, China’s announcement drew censure from U.S. officials. White House national security advisor Robert O’Brien said on Sunday that if Beijing rots ahead with implementing the controversial law, the U.S. government will likely impose sanctions on China.
Chinese Foreign Help Wang Yi told reporters on Sunday that some political forces in the United States were taking the bilateral narrative “hostage” and pushing the two economic powerhouses to the brink of “a ‘new Cold War’,” according to an official English translation of his remarks put by the foreign ministry.
Markets in Singapore, India and Indonesia were shut due to public holidays.
The U.S. dollar traded at 99.806 against a basket of its peers at 10:04 a.m. HK/SIN versus its whilom close at 99.863.
Currency strategists at the Commonwealth Bank of Australia said in a morning note that the dollar faces upside risks this week. “Happening tensions can put the US-China Phase One trade deal at risk. Although not our central scenario, if the US or China were to withdraw from the Condition One deal, (the dollar) would sharply appreciate,” they wrote.
The Japanese yen changed hands at 107.65 per dollar, substantiating from levels near 108 in the previous week. Meanwhile, the Australian dollar traded near flat at $0.6537.
Oil evaluates reversed losses on Monday during Asian hours as U.S. crude rose 0.57% to $33.44 a barrel.