Asia Pacific Shares

Asia-Pacific Shares Settle Lower after Trump Bans US Investments in Firms Linked to Chinese Military

The major Asia-Pacific stock indexes finished mixed but mostly lower on Friday with South Korea bucking the trend. Profit-taking ahead of the weekend was likely behind the move amid the surge in coronavirus cases in the United States and Europe that threatens to derail the global economic recovery. The news is also dimming optimism from positive vaccine news.

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 25385.87, down 135.01 or -0.53%. Hong Kong’s Hang Seng Index finished at 26156.86, down 12.52 or -0.05% and South Korea’s KOSPI closed at 2493.87, up 18.25 or +0.74%.

In China, the Shanghai Index settled at 3310.10, down 28.57 or -0.86% and in Australia, the S&P/ASX 200 Index finished at 6405.20, down 13.00 or -0.20%.

Trump Bans Americans from Investing in Chinese Firms Tied to Military

President Donald Trump has signed an executive order banning Americans from investing in Chinese firms that the administration says are owned or controlled by the Chinese military.

The order applies to 31 Chinese companies which it says “enable the development and modernization” of China’s military and “directly threaten” U.S. security.

Smartphone maker Huawei and Hikvision, one of the world’s largest manufacturers and suppliers of video surveillance equipment, are among the blacklisted companies. Some of the other companies listed, including China Telecom and China Mobile, trade on the New York Stock Exchange.

COVID-19 Watch

Traders in the East continued to monitor the COVID-19 situation in the United States, as daily new cases of the virus continued to rise in the country, setting fresh records. Investors also expressed concerns about the state of the fragile global economy as central bank leaders sounded the alarm.

U.S. Federal Reserve Chairman Jerome Powell warned Thursday that the “next few months could be challenging” despite recent developments on the vaccine front.

“From our standpoint, it’s just too soon to assess with any confidence the implications of the news for the path of the economy, especially in the near term,” Powell said regarding the vaccine.

South Korea Stocks Bounce Back, Samsung Electric Jumps to Record High

South Korean Shares bounced back from earlier losses on Friday, helped by sharp gains in market heavyweights including Samsung electronics. The Won and the benchmark bond yield both edged down.

Samsung Electronics climbed 3.6% to a record high on foreign investor buying, while other heavyweights SK Hynix, Hyundai Motor and Kakao Corp rose 1.8%, 2% and 2.2%, respectively.

Asiana Airlines, South Korea’s second-largest carrier, surged as much as 25.6% to a near seven-month high, while its affiliates and top shareholder jumped after reports of new acquisition talks. Shares soared on prospects that the debt-ridden pandemic-hit carrier may end up sharing a home with rival Korean Air Lines Co Ltd.

Foreigners were net buyers for a seventh straight session, purchasing 522.5 billion won ($468.61 million) worth of shares in the longest buying spree since mid-January. They had bought 3.76 trillion won worth of shares in the last six sessions.

For a look at all of today’s economic events, check out our economic calendar.

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James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.