Stocks gain in Asia as protectionism fears abate

Sydney - Asian stocks advanced as worries surrounding a trade war dissipated and US equities recouped losses. The dollar and Treasuries steadied.

Equities rose from Tokyo to Sydney. The MSCI Asia Pacific Index of stocks advanced and Hong Kong shares outperformed. Earlier, the S&P 500 Index bounced from a drop of as much as 1% as investors spooked by the departure of pro-trade adviser Gary Cohn took solace from suggestions that President Donald Trump’s tariff plan will spare select countries from much of the impact.

Later, the Wall Street Journal reported that Canada and Mexico will be given a 30-day grace period.

"If you look at the global economic backdrop the world still looks relatively good," JPMorgan Asset Management Australia Chief Executive Officer Rachel Farrell told Bloomberg Television.

"Long term we really look at fundamentals and fundamentals across the world are actually quite strong."

Markets this week have been gripped by geopolitical developments as the possibility of an escalating global trade war tested traders' nerves. Attention now turns back to central banks with investors honing in first on the commentary emanating from the European Central Bank’s policy meeting on Thursday, then to the Bank of Japan, which concludes its discussions on  Friday.

Elsewhere, Bitcoin tumbled amid fresh pressure from the US securities regulator. Crude oil traded above $61 a barrel after tumbling more than 2%.  

The Australian dollar was little changed after spiking on a better-than-expected trade balance number.

Here are some key events coming up this week:

The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20. China reports on its trade balance on Thursday.

The ECB isn’t expected to change policy on Thursday, but the Governing Council may discuss a change to pave the way for the end of quantitative easing. BOJ monetary policy decision and briefing on Friday. US monthly payrolls data come Friday.

And these are the main moves in markets:

Stocks

The Topix index was up 0.3% and the Nikkei 225 Stock Average rose 0.5% as of 1:19 p.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.6%. South Korea’s Kospi index was up 0.5 percent. Hong Kong’s Hang Seng Index advanced 1.4%.

The Shanghai Composite Index rose 0.3%. Futures on the S&P 500 added less than 0.1%. The MSCI Asia Pacific Index rose 0.7%.

Currencies

The Bloomberg Dollar Spot Index was little changed. The Japanese yen rose less 0.1% to 106.03 per dollar. The euro was flat at $1.2407.

Bonds

The yield on 10-year Treasuries was steady at 2.88%. Australia’s 10-year yield held at 2.80%.

Commodities

West Texas Intermediate crude gained 0.2% to $61.29 a barrel after dropping 2%. Gold inched up 0.2% to $1 327.87 an ounce.