Asia Markets: Asian markets mixed after surprising U.S. GDP report

Asian markets traded mixed Monday, following a better-than-expected U.S. GDP report on Friday and ahead of a new round of U.S.-China trade talks.

On Friday, data showed the U.S. economy grew 3.2% in the first quarter, higher than analysts’ expectations. That was thanks in part to the stockpiling of goods, although it was not immediately clear how, since data showed both domestic production and imports fell in the first three months of the year. On Wall Street, the benchmark Standard & Poor’s 500 index SPX, +0.47%   hit a new high Friday while the Dow Jones Industrial Average DJIA, +0.31%   also eked out a gain but ended the week down.

U.S. trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will lead a U.S. delegation to China on Tuesday to resume trade negotiations. Those will be followed by talks in Washington starting May 8. There have been reports that negotiations are in their final stage, and a final deal may be signed in late May or early June, putting an end to the yearlong tariff war between the world’s two largest economies.

The Fed board meets Tuesday and is due to issue a statement on its interest rate outlook Wednesday.

“Traders will be nervously watching for changes in its dovish outlook,” said Jeffrey Halley of OANDA in a report. “My guess is these nerves are misplaced, and the Fed will happily keep its powder dry with the optionality to cut if needed.”

Hong Kong’s Hang Seng Index HSI, +0.78% rose 0.7%, while the Shanghai SHCOMP, -0.78%  fell 0.7%. China’s smaller-cap Shenzhen Composite 399106, -2.43%   sank 1.2%. Singapore‘s benchmark index STI, +1.37% rose 1%, South Korea’s Kospi SEU, +1.70%   gained 1.2%, and Taiwan‘s Y9999, -0.12% slipped. Australia’s S&P/ASX 200 XJO, -0.41%   declined about 0.4%. Japan’s Nikkei was closed amid a 10-day national holiday to celebrate the ascension of Crown Prince Naruhito, who will become emperor May 1.

Among individual stocks, casino operator Sands China 1928, +3.38%   and property developer Country Garden 2007, +2.09%   advanced in Hong Kong, while Apple AAPL, -0.48%   supplier AAC Technologies 2018, -1.58%   fell. Samsung 005930, +2.90%   gained in South Korea, as did Hyundai Motor 005380, +2.58%  . Beach Energy BPT, -0.91%   and Oil Search OSH, -1.24%   fell in Australia.

Fresh data from China showed industrial profit rose 13.9% for March on an annual basis. Investors also looked ahead to Chinese manufacturing surveys this week. China’s economic growth rate held steady in the latest quarter despite the tariff war with Washington, fueling optimism the country’s downturn is bottoming out.

The latest data, along with the Fed report, may give reasons to “maintain optimism through some combination of data buoyancy,” said Vishnu Varathan of Mizuho Bank in a report.

“But equally, there are signs that optimism is stretched,” he said. “Especially if China tempers stimulus, the Fed hesitates on further easing and the details of a trade deal reveal trouble spots.”

In energy markets, benchmark U.S. crude CLM9, -0.76%   fell 35 cents to $ 62.95 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $ 1.91 on Friday to close at $ 63.30.

Oil prices increased during the first quarter after OPEC and Russia to limit production. More recently, prices have risen after Washington announced it will end waivers from sanctions for countries that import oil from Iran, including China, India, Japan and South Korea.

Brent crude LCOM9, -0.79%  , used to price international oils, lost 48 cents to $ 71.67 per barrel in London. The contract fell $ 2 the previous session to $ 71.63.

In currency trading, the dollar USDJPY, +0.15%   edged up to 111.67 yen from Friday’s 111.58 yen.

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