Asia Markets

Nikkei rises more than 300 points as rest of Asia gains after strong US jobs report

Key Points
  • Asian stocks closed higher on the first trading day of the week.
  • Gains in the region tracked Wall Street's advance on the back of better-than-expected jobs numbers.
  • Trade tensions looked set to linger, with no breakthrough in U.S.-China talks.

Asian stocks closed higher on Monday, tracking gains seen on Wall Street after Friday's expectation-topping U.S. jobs report and shrugging off trade-related concerns.

The made convincing gains, with the benchmark advancing 1.37 percent, or 304.59 points, to close at 22,475.94 as most sectors rose. Automakers and shippers were among the best-performing sectors, with the former rising 2.99 percent. with The broader Topix climbed 1.46 percent.

Hong Kong's , meanwhile, jumped 1.51 percent by 3:07 p.m. HK/SIN as technology and real estate sector shares led the move higher.

Gains elsewhere in the region were moderate, with the Kospi edging higher by 0.36 percent to 2,447.76 and the S&P/ASX 200 tacking on 0.59 percent to 6,025.50. The edged up by 0.52 percent to close at 3,091.19 and the smaller Shenzhen composite tacked on 0.09 percent to end at 1,747.96.

MSCI's broad index of shares in Asia Pacific excluding Japan, meanwhile, was higher by 1.13 percent in Asia afternoon trade.

The advance seen in the region came after Wall Street closed higher on Friday on the release of better-than-expected jobs numbers, with the Dow Jones industrial average rising 0.9 percent, or 219.37 points, to close at 24,635.21.

The U.S. economy added 223,000 jobs last month, topping a forecast of 188,000 in a Reuters poll. The unemployment rate dropped to 3.8 percent, its lowest since April 2000.

"The data highlight the fundamental strength of the U.S. economy, despite the geopolitical malaise and trade uncertainties," ANZ analyst said in a note, adding that a June rate hike from the Federal Reserve appeared "locked" in.

Trade uncertainty

Despite the positive mood, trade concerns continued to linger after U.S.-China trade talks yielded no major breakthroughs. China threatened that previous trade agreements negotiated by the countries "will not take effect" if the Trump administration goes ahead with a planned tariff increase.

U.S. allies also took aim during a G-7 finance leaders meeting at metals tariffs imposed by the Trump administration.

The "flip flop stance" taken by the Trump administration may give the U.S. an advantage in trade negotiations in the near term, but will force China to adopt a tougher approach in the medium term, said Tommy Xie, head of greater China research at OCBC Bank, in a note.

"Market will continue to watch out for how President Trump wants to play his unpredictability card, which will be the new normal for global diplomatic relationships," Xie added.

The greenback held onto most gains made on the back of Friday's robust jobs report. Against the yen, the dollar traded at 109.65 at 2:42 p.m. HK/SIN.

The dollar index, which tracks the dollar against a basket of rival currencies, was slightly softer at 94.030.

On the energy front, U.S. crude futures were off by 0.05 percent at $65.78 per barrel. Brent crude futures edged down 0.29 percent to $76.57. Oil had come under pressure in the last session on the back of the firmer dollar.

In corporate news, PC maker Lenovo's removal from Hong Kong's benchmark Hang Seng Index took effect on Monday. CSPC Pharmaceutical Group, a Chinese drugmaker, replaced the computer maker as part of the index.