Asian Shares Rise On Trade Optimism; Nikkei Underperforms

(RTTNews) - Asian shares rose broadly on Monday, though Japanese markets fell sharply due to profit taking after last week's rally.

Underlying sentiment remained supported somewhat as the EU and the U.S. struck a last-minute trade agreement and reports suggested the U.S. and China are likely to extend their tariff truce for another 90 days.

The EU-U.S. agreement includes a 15 percent tariff on EU goods, down from the 30 percent originally proposed.

The EU has committed to purchasing $750 billion worth of U.S. energy and investing $600 billion more into the American economy as part of the agreement.

The dollar index held near a one-week high ahead of a busy week for markets, with key data releases, the Federal Reserve's interest-rate decision and earnings reports from major tech companies awaited.

Magnificent Seven members Apple Inc., Amazon.com Inc., Microsoft Corp. and Meta Platforms Inc. are all due to report their numbers this week.

Gold held steady near $3,340 per ounce in Asian trade while oil prices climbed on optimism that the U.S.-EU trade deal could boost economic activity and lift energy demand.

China's Shanghai Composite index edged up by 0.12 percent to 3,597.94 ahead of U.S.-China talks in Stockholm to resolve trade tensions and extend the truce before it expires on August 12.

Investors shrugged off data that showed China's industrial earnings fell for a second straight month in June.

Hong Kong's Hang Seng index rose 0.68 percent to 25,562.13 as concerns about a potentially painful trade war eased.

Japanese markets fell sharply as investors looked ahead to the Bank of Japan's rate decision on Thursday for hints about the near-term rate outlook.

Traders also shifted their focus to domestic corporate earnings and pondered the implications of the U.S.-Japan trade deal.

The Nikkei average tumbled 1.10 percent to 40,998.27 while the broader Topix index settled 0.72 percent lower at 2,930.73.

Chip-related shares paced the decliners, with Advantest and Screen Holdings plummeting 9-10 percent. Robot maker Fanuc soared 5 percent after its quarterly operating profit jumped nearly 30 percent.

Seoul stocks ended higher for a fourth day running, with the Kospi average rising 0.42 percent to 3,209.52.

Samsung Electronics surged 6.8 percent after announcing a $16.5 billion chip supply deal with U.S. tech giant Tesla.

Australian markets eked out modest gains, led by banks as falling iron ore and copper prices weighed on the mining sector.

The benchmark S&P/ASX 200 rose 0.36 percent to 8,697.70 while the broader All Ordinaries index closed 0.33 percent higher at 8,963.50.

Boss Energy shares plummeted 44 percent after the company flagged operational challenges at its flagship Honeymoon uranium project in South Australia.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index ended 0.45 percent higher at 12,910.74, extending gains for a third straight session.

U.S. stocks rose Friday on the back of strong earnings, hopes for more U.S. trade deals and easing Fed independence fears.

The tech-heavy Nasdaq Composite inched up 0.2 percent and the S&P 500 added 0.4 percent to reach new record closing highs while the narrower Dow gained half a percent.