Asian stocks turned widely higher by midday, led by a nearly 2% gain in Hong Kong, as investors looked past the trade worries that fueled Friday’s declines on Wall Street.
The Hang Seng Index HSI, +1.19% , down 5.3% during a three-week losing streak, ending morning trading up 1.8% at midday. All 50 stocks in the benchmark were higher.
The jump was mostly technical in nature, a correction expected after the recent weakness and robust 2017 reports of late from large Chinese firms, said Dickie Wong, head of research for Kingston Securities. But he added volatility should persist as Hong Kong is more exposed to foreign investors, which could react quickly to trade developments between the U.S. and China.
Meanwhile, Japan’s Nikkei NIK, +0.51% jumped following the midday break as the yen fell to session lows and was recently down as much as 0.3% versus other major currencies. The Nikkei was up 0.6% after spending the morning little changed.
Similar gains were seen in much of the region, and S&P 500 futures ESM8, +0.70% were recently 0.7% higher following Friday’s skid.
Tech stocks, which have been leading recent global stock weakness, were strong in Asia. Samsung Electronics 005930, +1.65% climbed 1.8% in South Korea to erase last week’s drop, while Nintendo 7974, +0.86% climbed more than 1% in Japan.
“Markets don’t want to be excessively and prematurely alarmed,” said Vishnu Varathan, a senior analyst at Mizuho Bank in Singapore.
The stock moves came after President Donald Trump said in a tweet Sunday he expects China to lower trade barriers with the U.S. acting reciprocally on taxes. “Great future for both countries!” Mr. Trump tweeted.
Read: Trump administration dials down the rhetoric on China tariffs
Varathan said the tweet hinted at a more conciliatory tone, with Trump appearing “less abrasive.”
Even in the less likely scenario of a “full-blown” trade war, U.S. tariffs on $50 billion of Chinese imports would hurt just 0.1% of Asia’s economic output excluding China, said Société Générale economists in a note to clients. “Further escalation and the potential second-round impact from deteriorating business sentiment and rising inflation would be more dangerous,” they added.
Investors also appeared to be encouraged by news that North Korea has confirmed its readiness to discuss denuclearization of the Korean Peninsula with the U.S.
“If you read between the lines, then you can expect China to have helped, “ said Mizuho Bank’s Varathan.
Chinese stocks SHCOMP, -0.06% were a relative laggard Monday morning, with the Shenzhen Composite briefly falling 1% soon after trading began. But it entered the midday break with a 0.3% gain, similar to other Chinese benchmarks.
In other asset classes, oil was at session highs in midday trading, after missiles hit a Syrian air base according to Syrian state TV. That followed an alleged chemical-weapons attack on a Damascus suburb. Oil futures CLK8, +0.42% were recently up about 0.5% after also falling some 2% Friday during the weakness in U.S. equities.