TOKYO: Asian stocks were widely higher for a second day after the French presidential election, but gains again trailed those logged overnight in Europe and the U.S. Meanwhile, investors in Asia are on North Korea watch. Tuesday marks the 85th anniversary of the founding of North Korea’s army, and North Korea observers have speculated that the county would test a nuclear device or missile. That could raise the stakes in the recent war of words between North Korea and the U.S. On Monday, President Donald Trump called on United Nations diplomats to deal with North Korea’s nuclear-weapons program. “Unbridled risk-on trade at this point in time is not a given,” said Vishnu Varathan, a senior economist at Mizuho Bank in Singapore. The market optimism over Emmanuel Macron’s victory in France’s first round of voting is losing steam, he said. Still, equities are advancing in Asia. Japan continued to lead the way after Monday’s 1.4% jump in the Nikkei Stock Average NIK, +1.12% . It finished morning trading up 0.8% as the dollar moved back above ¥110 after hitting session lows near ¥109.60. The currency moves helped export-reliant stocks. Nintendo 7974, +2.16% and Mazda 7261, +1.77% rose about 1.6%.
The uptick in sovereign-debt yields such as U.S. Treasurys after the election results also helped Japanese insurers, which invest heavily in the sector. In Hong Kong, the Hang Seng Index HSI, +1.19% advanced 0.8% amid broad-based buying in bank, insurance and infrastructure stocks. Stabilization in Chinese equities also helped. The Shenzhen Composite 399106, +0.46% gained 0.7% while Shanghai’s benchmark SHCOMP, +0.10% rose slightly after Monday’s 1.4% drop, the biggest in four months. Still, caution remains about both markets amid potential Chinese regulatory action and liquidity squeezes, said Ben Bei, a Hong Kong and China strategist at broker CIMB. Mainland money flowing into Hong Kong stocks is expected to be muted for the near term, he added. Elsewhere, South Korea’s Kospi SEU, +1.05% rose 0.5% as consumer confidence rose the most in nearly four years after the removal of President Park Geun-hye. “We credit the export-led recovery for stronger consumer confidence,” said Tim Condon, head of research for ING in Asia. Markets are closed in Australia and New Zealand for a holiday.
