Asia markets were higher on Tuesday morning following yet another day of record highs on Wall Street as the U.S. and Mexico announced a new trade agreement.
The Nikkei 225 traded in positive territory in the morning, up by 0.74 percent, with the country’s shipping sector rising 2.67 percent. South Korea’s Kospi was also in positive territory as it traded up by 0.32 percent, with industry heavyweight Samsung Electronics rising 0.65 percent.
The ASX 200, meanwhile, traded up by 0.66 percent as the market Down Under continued its recovery from last week’s political turmoil. Vitamin maker Blackmores lost some of its earlier gains, but it still traded up by 8.31 percent in the morning after earlier reporting a 18.6 percent rise in its full-year profit.
Over in the Greater China markets, Hong Kong’s Hang Seng index was in positive territory in early trade, up by 0.82 percent. In contrast, mainland Chinese stocks traded in relatively cautious territory. The Shanghai composite was up by 0.15 percent, while the Shenzhen composite traded largely flat.
Overnight, stocks on Wall Street moved higher. The S&P 500 gained 0.8 percent to close at 2,896.74 — yet another record high. The Nasdaq Composite also ended the trading day stateside up by 0.9 percent to an all-time high of 8,017.90. The Dow Jones Industrial Average was up by 259.29 points to close at 26,049.64.
On Monday, the United States and Mexico announced that a deal had been agreed upon after months of negotiations between the two countries over the future of the North American Free Trade Agreement. The new deal, which President Donald Trump has said would be called The United States-Mexico Trade Agreement, is expected to last 16 years and will be reviewed every six years pending its approval by Congress, according to U.S. Trade Representative Robert Lighthizer.
“Risk sentiment was given a further leg up overnight with the news that the US and Mexico had agreed on a trade deal to replace NAFTA,” David de Garis, a senior economist at the National Australia Bank, said in a morning note, adding that “sticking points over the automotive sector have been resolved.”
Other economists, however, warned that the U.S.-Mexico trade deal may not bode well for America’s ongoing trade spat with China.
“Far from ushering in a more reasonable attitude to free trade generally, it is safer to view this latest deal as one that the US has managed to bash into shape by sheer negotiating muscle,” economists Robert Carnell and Prakash Sakpal of ING Asia Pacific said in a note.
“So as far as China and Asia are concerned, this new Mexico deal solves nothing. Indeed, it strengthens the US position to play hard-ball with China. This doesn’t look good for the region,” they added.
The U.S. dollar index, which tracks the greenback against a basket of currencies, stood at 94.829 as of 9:45 a.m. HK/SIN.
In other currency news, China’s central bank lifted its official yuan midpoint by the most in nearly 15 months to 6.8052 per dollar. Investors are carefully eyeing the Chinese currency in light of a recent policy change from the People’s Bank of China.
Oil prices increased on the back of Wall Street’s performance and news of the U.S.-Mexico trade deal. Global benchmark brent crude traded 0.21 percent higher at $76.37 a barrel. U.S. West Texas Intermediate crude futures gained 0.1 percent at $68.94 a barrel.
— Reuters contributed to this report.