Investing.com-- Most Asian stocks rose marginally on Thursday as investors second-guessed recent optimism over a deescalation in the U.S.-China trade war, although Japanese markets outperformed on reports of more U.S. trade dialogue.
South Korean markets were an exception, with the KOSPI lagging its peers after gross domestic product data showed an unexpected contraction for the first quarter. This largely offset positive earnings from memory chip major and Nvidia (NASDAQ:NVDA) supplier SK Hynix.
Broader Asian markets tracked overnight gains on Wall Street, as investors were encouraged by U.S. President Donald Trump flagging an eventual, albeit unspecified reduction in trade tariffs on China. Trump’s cooling rhetoric against the Federal Reserve also aided sentiment.
U.S. stock index futures trickled higher in Asian trade. But optimism over Trump’s comments was seen cooling, given that Trump signaled any deal with China will require Beijing to approach Washington- a scenario that Chinese officials have shown little indication will play out.
Comments from other U.S. officials also raised some doubts over a U.S.-China deescalation.
Japan shares lead gains on trade talk reports
Japanese markets were the best performers on Thursday, with the Nikkei 225 adding nearly 1%, while the TOPIX rose 0.8%.
A slew of media reports said Japan’s Economic Revitalization Minister Ryosei Akazawa will visit the U.S. later this month for a second round of trade negotiations.
A separate report on Wednesday showed U.S. officials stating that they will not offer Japan special treatment from Trump’s trade tariffs. But Japanese ministers were seen maintaining their calls for smaller tariffs and more transparent trade agreements.
Japanese automakers- which stand to be among the worst-hit by Trump’s tariffs, rose on Thursday after the Financial Times reported Trump may exclude automobile components from his 25% tariff on foreign vehicles. Toyota Motor (NYSE:TM) Corp (TYO:7203) soared over 5%, also benefiting from plans to expand a U.S. plant, while Honda (NYSE:HMC) Motor (TYO:7267) added 2%.
Among other Japanese stocks, Nintendo Co Ltd (TYO:7974) surged more than 5% and was among the top performers on the Nikkei, after the videogame giant flagged outsized demand for its upcoming Switch 2 console.
Chipmaker Renesas Electronics Corp (TYO:6723) rose 1.1% even as it clocked weaker earnings for the March quarter.
Broader Asian markets were mostly upbeat. Australia’s ASX 200 rose 0.6%, while Singapore’s Straits Times index added 0.3%.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes added about 0.5% each. But Hong Kong’s Hang Seng lost 0.4% on some profit-taking in major Chinese internet stocks.
Several major Chinese companies are set to report quarterly earnings this week, including Tesla (NASDAQ:TSLA) rival BYD (HK:1211) and PetroChina (HK:0857), both due on Friday.
Futures for India’s Nifty 50 index pointed to a mildly negative open. Focus was squarely on how the Indian government would retaliate over a deadly terrorist attack in the state of Kashmir this week.
South Korea shares fall on weaker-than-expected GDP
South Korea’s KOSPI fell 0.6%, lagging its peers after GDP data showed an unexpected contraction in the economy in the first quarter.
GDP shrank 0.2% quarter-on-quarter and 0.1% year-on-year, as heightened trade disruptions stemming from Trump’s trade tariffs dented South Korea’s key exports.
The weak GDP print largely offset quarterly robust earnings from memory chip giant SK Hynix Inc (KS:000660), as it continued to benefit from outsized artificial intelligence demand.
SK Hynix shares fell slightly.