Asian shares slightly higher, US growth lifts dollar, yields

3 March, 2019 12:00 AM printer

SHANGHAI: Asian shares inched higher on Friday with broader gains capped by investor caution as concerns about China's economy and global trade weighed on sentiment while stronger-than-expected U.S. GDP data pushed the dollar up.

MSCI's broadest index of Asia-Pacific shares outside Japan was up less than 0.1 percent in early trade, report agencies.

Japan's Nikkei 225 gained 0.8 percent, helped by the weaker yen, while Australian shares added 0.6. percent.

Investors will be looking to the opening of Chinese markets after the benchmark Shanghai Composite index posted its strongest monthly gain in nearly four years in February.

Gains in Chinese shares may be further boosted after global index provider MSCI said it would quadruple the weighting of mainland shares in its global benchmarks later this year, potentially drawing more than US$80 billion of fresh foreign inflows to the world's second-biggest economy.

U.S. President Donald Trump on Thursday fueled concerns over trade talks between the United States and China, warning that he could walk away from a trade deal with China if it were not good enough.

That contrasted with subsequent comments from White House economic adviser Larry Kudlow on Thursday, who called progress in the negotiations "fantastic" and said the countries were "heading toward a remarkable, historic deal."

Mixed messages on trade combined with the collapse of the summit between U.S. President Donald Trump and North Korean leader Kim Jong Un on denuclearization, and data from China showing slowing factory activity to pressure U.S. stocks.

"News that President Trump walked out of the meeting with Supreme Leader Kim, because the two sides couldn't reach an agreement over North Korea's nuclear disarmament, dashed hopes for an easing in geopolitical tensions," analysts at ANZ said in a morning note.

South Korea's financial markets are closed Friday for a public holiday.