Tuesday 21/05/2019 - 06:02 pm

Trump and N Korea talks: Asia markets rally on peace hopes

2018.03.10 01:10

Asian markets rallied on Friday, on hopes that North Korean nuclear tensions might be easing.

Investors responded to US President Donald Trump accepting an invitation for face-to-face talks with North Korean leader Kim Jong-un.

There was already some optimism on the markets after Mr Trump earlier left the door open for possible exemptions to US tariffs on steel and aluminium.

South Korea and Japans main markets began well but later shed some gains.

Seouls Kospi index finished 1.1% ahead.

Meanwhile Japans Nikkei 225 index - which initially rose by 2.5% - closed only 0.5% higher.

A sigh of relief is no surprise

Analysis by Karishma Vaswani, Asia Business Correspondent

Investors in the region have been watching the potential conflict between the US and North Korea for months now.

And news that the two could meet by May of this year is being greeted with a sigh of relief by many. And that shouldnt come as a surprise.

Nobody wants a conflict on the Korean peninsula to break out, especially between arguably two of the worlds most volatile leaders.

East Asian economies would be almost certainly be hit, because of integrated supply chains in the region. Its a region central to global shipping and manufacturing, so any escalation of the current tensions could disrupt trade and economic activity.

But perhaps whats more interesting, is what a potential meeting between "Rocket Man" and the "Dotard" says about just how badly the North Korean economy may be doing as sanctions bite.

Hong Kongs Hang Seng ended 1.1% higher, while Chinas mainland indexes also made small gains.

The South Korean won climbed slightly, while the Japanese yen slipped against the US dollar.

That is not unexpected given the yen is a safe haven currency, with investors tending to seek out riskier assets with better returns when things appear more stable.

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