Asia report: Markets mixed as Trump meets with Xi

(Sharecast News) - Asia-Pacific markets were mixed on Thursday as investors looked to a high-stakes meeting between US president Donald Trump and his Chinese counterpart Xi Jinping for signals on the future of US-China relations and global trade.

"Asian equities are struggling to extend the rally cleanly despite a constructive tone from the Trump-Xi summit," said Patrick Munnelly, market strategy partner at TickMill.

"MSCI Asia Pacific is up just 0.1% after earlier gaining 0.8%, while mainland China has faded, with the CSI 300 down 1.3% and Shanghai off 1%, despite both leaders leaning into cooperation language."

Trump landed in Beijing on Wednesday for the closely watched summit, accompanied by US executives including Tesla chief executive Elon Musk and Nvidia boss Jensen Huang.

Analysts at Goldman Sachs said in a note that they expected the meeting to focus narrowly on trade and export controls, including tariffs and restrictions on rare earths and semiconductors, rather than producing a sweeping reset in relations.

Goldman said China could agree to increase purchases of US farm goods, energy and aircraft in exchange for avoiding further tariff increases.

"While unlikely to be a game changer for US-China relations, we think the meeting could act as a tactical catalyst for strength in the Chinese yuan and Chinese equities," its analysts wrote late on Wednesday.

The bank maintained a positive view on China assets, citing export competitiveness and an "undervalued" currency, and reiterated its overweight call on Chinese equities, particularly mainland A-shares over Hong Kong-listed H-shares.

"Trump talked up a 'fantastic future' for US-China relations, Xi emphasised cooperation over rivalry, and the US business delegation - including Nvidia's Jensen Huang and Tesla's Elon Musk - helped reinforce the market-friendly optics," Munnelly said.

"The offshore yuan's 11th straight advance, its longest winning run since 2017, suggests foreign exchange markets are giving the diplomacy more credit than Chinese equities are."

Markets mixed across Asia

In equities, Japan's Nikkei 225 fell 0.98% to 62,654.05, while the broader Topix declined 1.03% to 3,879.27.

Fujikura dropped 19.1%, Mitsubishi Materials lost 12.1%, and Dai Nippon Printing fell 11.29%.

In China, the Shanghai Composite fell 1.52% to 4,177.92, while the Shenzhen Component dropped 2.14% to 15,745.74.

China Spacesat, Wuxi Hongsheng Heat Exchanger Manufacturing and Fuda Alloy Materials each fell 10%.

Hong Kong's Hang Seng Index was almost flat, edging up 0.002% to 26,389.04.

Li Auto rose 4.34%, Alibaba Group gained 3.84%, and Orient Overseas International added 3.35%.

South Korea's Kospi 100 advanced 1.82% to 9,654.17, led by LG Electronics, which rose 13.38%.

KakaoPay gained 13.11%, while Sam Yang Foods added 11.12%.

"The AI trade remains the main offset to broader macro caution," Munnelly said.

"A regional technology index rose as much as 2.3% to a record high, Nasdaq futures are up 0.3%, and Cisco's 20% after-hours surge on stronger sales guidance adds to the sense that AI-linked capex momentum is still filtering through corporate earnings.

"The message is familiar: investors are willing to look through higher inflation risk so long as AI earnings momentum remains credible."

Sydney bourse rises as Wellington falls

Turning down under, Australia's S&P/ASX 200 edged up 0.12% to 8,640.70.

Megaport surged 27.73%, Codan rose 4.33%, and Insurance Australia Group gained 3.68%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 fell 0.29% to 13,025.07.

Air New Zealand dropped 5.81%, Heartland Group lost 4.46%, and A2 Milk Company declined 3.73%.

Dollar broadly stronger as oil prices rise

In currencies, the dollar was last up 0.03% on the yen to trade at JPY 157.90, as it gained 0.18% against the Aussie to AUD 1.3803, but slipped 0.01% on the Kiwi to change hands at NZD 1.6845.

Oil prices rose, with Brent crude futures last up 0.72% on ICE at $106.39 per barrel, and the NYMEX quote for West Texas Intermediate gaining 0.48% to $101.50.

Reporting by Josh White for Sharecast.com.