Home Editor's Picks Asia stocks: China slides as EU tariffs take effect, Samsung boosts S. Korea

Asia stocks: China slides as EU tariffs take effect, Samsung boosts S. Korea


Investing.com– Asian stocks were a mixed bag on Friday with Chinese shares sliding further on increased tensions with Taiwan, while South Korean markets outperformed on gains in Samsung.  

Broader markets were mostly rangebound in anticipation of key U.S. nonfarm payrolls data later in the day.

A U.S. market holiday on Thursday made for limited trading cues, while some cooling sentiment over interest rate cuts also factored into market caution. U.S. stock index futures moved little in Asian trade.

Chinese stocks sink as Taiwan tensions grow 

Chinese stocks were the worst performers for the day, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes losing about 1% each. Both indexes extended a slump seen through most of June and early-July.

Friday’s were driven by concerns over increased tensions with Taiwan, after reports said China had seized a Taiwanese fishing trawler operating near the Chinese coast. Reports on Friday also said that Chinese military aircraft were in the Taiwan strait. 

Other reports also showed Taiwanese firms were pulling out staff from China, after Beijing warned of extreme measures, including the death penalty, against supporters of an independent Taiwan. 

Markets feared that any escalation in tensions, particularly aggression by Beijing, could draw in U.S. ire and spark more economic restrictions against China. 

Losses in mainland stocks pulled Hong Kong’s Hang Seng index down 0.8%. 

South Korean stocks outperform as Samsung flags bumper Q2 

South Korea’s KOSPI was the best performer in Asia on Friday, rising nearly 1%.

The index was boosted by a 1.5% rise in Samsung Electronics Co Ltd (KS:005930), the largest stock in the country, after the electronics conglomerate flagged a 15-fold spike in its second quarter profit.

Samsung benefited greatly from increased demand for memory chips from the artificial intelligence industry, which pushed up sales and also improved margins. Its consumer electronics business was also seen benefiting somewhat from AI integration.

Gains in Samsung spilled over into other chipmaking stocks. Memory chips rival SK Hynix Inc (KS:000660) rose 1.7%.

Japanese stocks test record highs amid weak yen, BOJ bets 

Japan’s Nikkei 225 and TOPIX indexes steadied near record highs on Friday, with the latter briefly hitting record levels. 

Recent strength in Japanese markets was driven by export-oriented stocks surging against a weaker yen, while the prospect of limited monetary tightening by the Bank of Japan also boosted sentiment.

Household spending data read substantially softer than expected for May on Friday, furthering the notion that the Japanese economy remained fragile and will need more monetary support. This in turn furthered bets that the BOJ has limited headroom to tighten policy further, keeping in place most of the ultra-loose monetary conditions enjoyed by Japanese markets for nearly a decade. 

Japanese tech stocks also tracked gains in Samsung. Investment giant SoftBank Group Corp. (TYO:9984) rose 0.4% and sat at record highs as a report said the firm was seeking large volumes of chips from NVIDIA Corporation (NASDAQ:NVDA). 

Broader Asian markets moved in a flat-to-low range. Concerns over China saw Australia’s ASX 200 fall 0.2%.

Futures for India’s Nifty 50 index pointed to a mildly negative open, with Indian shares vulnerable to some profit taking after a series of record highs over the past week.

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