Asia-Pacific Shares Mixed; Export Jump Boosts South Korea’s KOSPI; Hong Kong Capped by Sino-US Tensions

The major Asia-Pacific shares finished mixed on Friday, following Wall Street’s lead. Stocks slipped as tricky Brexit negotiations and uncertainty over U.S. stimulus talks capped riskier bets even though COVID-19 vaccines made progress.

Lower U.S. futures were a drag on sentiment as near-term U.S. fiscal stimulus appeared unlikely. Democrat House Speaker Nancy Pelosi suggested wrangling over a spending package and coronavirus aid could drag on through Christmas.

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 26652.52, down 103.72 or -0.39%. Hong Kong’s Hang Seng Index finished at 26505.87, up 95.28 or +0.36% and South Korea’s KOSPI Index closed at 2770.06, up 23.60 or +0.86%.

In China, the Shanghai Index settled at 3347.19, down 26.08 or -0.77% and in Australia, the S&P/ASX 200 index finished at 6642.60, down 40.50 or -0.61%.

Brexit also worried investors after British Prime Minister Boris Johnson said on Thursday there was “a strong possibility” Britain and the European Union would fail to strike a trade deal.

Britain and the EU have set a deadline of Sunday to find an argument, before Britain’s exit from the bloc on January 1. The odds of a disorderly Brexit rose to 61% on Friday from 53% a day before, according to the Smarkets exchange.

South Korea Stocks Jump on Strong Trade Data, Vaccine Optimism

South Korean shares jumped over 1% on Friday as strong exports data added to signs of recovery from the coronavirus-induced economic slump.

South Korea’s exports during the first 10 days of December jumped 26.9% from a year earlier, official data showed on Friday.

Hong Kong Shares Rise on Vaccine Hopes, Sino-US Tensions Cap Gains

Hong Kong stocks tracked higher as progress on COVID-19 vaccines boosted sentiment, although gains were capped due to a flare up in Sino-U.S. tensions.

Asian markets were buoyed by optimism that imminent vaccinations would fuel economic recovery. U.S. authorities voted overwhelmingly to endorse emergency use of Pfizer’s coronavirus vaccine, while doses of a COVID-19 vaccine made by China’s Sinovac Biotech are rolling off a Brazilian production line.

But the Hong Kong market is clouded by signs of deterioration in Sino-U.S. relationship as the U.S. Federal Communications Commission (FCC) begun the process of revoking China Telecom’s authorization to operate in the United States.

S&P Dow Jones Indices on Thursday became the second major index provider to remove some Chinese companies from its index products following a Trump administration executive order. FTSE Russell made a similar move last week, while rival publisher MSCI is expected to follow suit.

Hong Kong-listed shares of the U.S.-blacklisted companies, including CRRC, China Communications Construction Co and China State Construction all fell on Friday.

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