HONG KONG: Asian markets mostly rose Wednesday, building on a positive start to the week as investors are cheered by healthy earnings but uncertainty caused by the US-China trade row is keeping optimism in check.
Donald Trump warned countries that do business with Iran would not be able to trade with the United States
Wall Street provided another strong lead with the Nasdaq approaching a record high, while energy firms in Asia pressed on with their rally following more gains in oil prices.
Hong Kong was 0.1% higher in early trade while Tokyo ended the morning session 0.4% up and Sydney edged 0.3% ahead. Seoul, Wellington and Taipei all posted gains but Shanghai dipped 0.6%.
While the gains are welcome, traders remain on edge for any new developments in the trade saga between the world's top two economies.
On Tuesday the US said Donald Trump's 25% tariffs on a further $16 billion of Chinese goods will kick in on Aug 23. That is on top of the measures imposed on $34 billion of imports last month.
The move had been widely expected but with China lining up retaliatory measures it reinforced worries that the two sides are heading for an all-out trade war that could hammer the global economy. The White House has also lined up another $200 billion to target in future.
The yuan got some support after a Bloomberg News report said the Chinese central bank had emphasised the need for currency stability to the country's lenders as it looks to halt a slide in recent months.
It said officials called on bosses to prevent "herd behaviour" and momentum-chasing moves in the forex markets, fearing a run on the yuan similar to 2015-16, which hammered the unit and sent global markets into a tailspin.
The report comes after Friday's move by the People's Bank of China to make it harder to bet against the currency.
"This move is consistent with what the PBoC did earlier -- it can be considered as preemptive efforts made to slow the yuan’s depreciation, prevent one-sided bets on weakness and avoid a sense of panic," Eddie Cheung, Asia foreign-exchange strategist at Standard Chartered in Hong Kong, told Bloomberg.
Energy firms remain popular as oil prices rise on the back of worries about the trade row and a drop in Saudi Arabian output.
Both main contracts were flat in Asia after clocking up big gains on Tuesday.
Prices also got support from the US reimposing a first round of sanctions on Tehran after leaving the nuclear deal, with an embargo on the country's crude exports in November.
Trump warned other countries against doing business with Iran in the face of the sanctions, saying they would be refused from trading with the United States.
"The entreaty of the Americans that anyone who will do business with them (Iran) won't be able to do business in the US is something to watch," said Greg McKenna, chief markets strategist at AxiTrader.