Asian indexes recover on US-North Korea improvements

Stock indexes in Asia closed mainly higher on Monday, reversing early losses following positive developments regarding US-North Korea relations.

Investors kept an eye in geopolitics over the weekend, as a US delegation arrived to North Korea for discussions about the still unconfirmed Summit between Trump and Kim Jong Un.

President Trump tweeted: “Our United States team has arrived in North Korea to make arrangements for the Summit between Kim Jong Un and myself. I truly believe North Korea has brilliant potential and will be a great economic and financial Nation one day. Kim Jong Un agrees with me on this. It will happen!”

This improvement followed a meeting between South Korean President Moon Jae-in and his North Korean counterpart on Saturday. Last week, market participants flew to safe-havens as Trump called off the meeting with Kim due to Pyongyang’s “inflammatory comments”.

In Japan, the Nikkei 225 ended at 22,475.50 points, rising 0.11 percent, while the broader Topix was down 0.07 percent at 1,770.42 points. Oil-related components weighed on the index.

South Korea’s Kospi was boosted by US-North Korea news, adding 0.74 percent in today’s session. Hyundai Steel was among the best performers, sky-rocketing nearly 17 percent.

Hong Kong’s Hang Seng Index was about 0.72 percent higher by the time of this writing, while mainland Shanghai eased 0.19 percent and the Shenzhen rose 0.06 percent.

Down under, Australia’s S&P/ASX 200 was down 0.48 percent, with energy and materials pushing the benchmark to the downside.

The drop in crude prices was a result of rising concerns that the Organization of the Petroleum Exporting Countries would decide to partially increase output levels to avoid market disbalance.

"We've been calling for oil prices this year to be relatively range-bound around the mid-$60s level and I think that's a level that OPEC's relatively comfortable with," JP Morgan Asset Management Strategist Hannah Anderson said in an interview.

Ahead in the day, markets will experience low volatility as the US will remain closed in observance of the Memorial Day holiday.

FortFS