Asian, European stocks up after historic North Korea summit
HONG KONG — Major markets in Asia and Europe rose Tuesday after Donald Trump and Kim Jong Un held a historic summit, while investors look ahead to key policy meetings at the Federal Reserve and European Central Bank this week.
Trump said he had formed a "special bond" with the North Korean leader, who reaffirmed his commitment to "complete denuclearisation of Korean Peninsula" in a joint agreement signed by the two.
While the meeting was not expected to see any immediate results, it has provided hope for peace on the Korean peninsula.
However, investors remain concerned about a possible global trade war after the weekend's Group of Seven summit in Canada ended with Trump withdrawing support for a joint communique and accusing host Prime Minister Justin Trudeau of being dishonest.
That came just after he had hit Canada, Mexico and the European Union with steel and aluminium tariffs, sparking threats of retaliation that some fear could escalate.
For most of the day eyes were on Singapore, where Trump and Kim became the first sitting leaders of their countries to meet.
The pair signed what Trump called a "pretty comprehensive" and "very important" document, which spoke of "new US-DPRK relations" and committed Washington to "security guarantees".
Kim said the two Cold War foes had vowed to "leave the past behind" and promised "the world will see a major change".
'Air of optimism'
Stocks fluctuated through the day but by the end of trade Tokyo was up 0.3 percent and Shanghai closed 0.9 percent higher. Hong Kong was 0.1 percent higher.
However, Seoul dipped 0.1 percent, while the Korean won eased 0.2 percent.
Singapore was slightly lower, as were Wellington, Kuala Lumpur and Taipei.
In early trade London and Paris each rose 0.3 percent, while Frankfurt gained 0.8 percent.
"After quickly shrugging off the G7 fight club in Quebec, investors latched on to the air of optimism circulating from the Singapore summit," said Stephen Innes, head of Asia-Pacific trading at OANDA.
"And with pro-euro signals emanating from the newly formed Italian government placating investors anxiety about the future of the eurozone, the global risk was in the happy zone Monday."
However, Goohoon Kwon, co-head of Korea research and senior Asia economist at Goldman Sachs, told Bloomberg Television ahead of the signing that markets had already factored in a lower risk of conflict on the Korean peninsula.
He added that the "follow through, execution, implementation" of any agreements was most crucial.
While the Trump-Kim summit was the big news story, traders are keenly awaiting the Fed and ECB policy meetings. The US bank is expected to lift interest rates Wednesday but its post-meeting statement will be closely watched for a clue about its plans for future hikes.
Then on Thursday, European bank officials will likely debate for the first time cutting back on their crisis-era stimulus programme.
The euro extended gains after rallying Monday on the back of comments from new Italian Finance Minister Giovanni Tria ruling out Rome's exit from the single currency. That eased concerns about his populist, Eurosceptic government's intentions regarding the currency bloc.
The pound was also under pressure as British MPs prepare to vote on a string of amendments to key Brexit legislation that could force Prime Minister Theresa May's hand in talks with the European Union.
The United States formally concluded that North Korea ordered the murder of Kim Jong-Nam, a half-brother and potential rival to ruler Kim Jong-Un, with the VX nerve agent.
"This public display of contempt for universal norms against chemical weapons use further demonstrates the reckless nature of North Korea and underscores that we cannot afford to tolerate a North Korean WMD program of any kind," US State Department spokeswoman Heather Nauert said.
The finding triggered another layer of US economic sanctions against Pyongyang, just as South Korea reported that the regime is ready for talks to end a nuclear standoff.
Suspected North Korean hackers have attempted an attack targeting a major joint military exercise between Seoul and Washington that starts on Monday, South Korean police said.
South Korea and the United States will kick off the annual Ulchi Freedom Shield drills on Monday through August 31 to counter growing threats from the nuclear-armed North.
Pyongyang views such exercises as rehearsals for an invasion and has repeatedly warned it would take "overwhelming" action in response. — AFP
The United States says it was committed to freeing an American soldier who crossed into North Korea, as it voiced caution on remarks attributed to him by Pyongyang.
In North Korea's first comments about last month's crossing of Travis King, state media said Tuesday that the soldier, who is Black, said he fled "racial discrimination" and bore "ill feeling" toward the US Army.
"We would caution everyone to consider the source here. That is incredibly important," White House Press Secretary Karine Jean-Pierre tells reporters when asked about King's purported remarks. — AFP
A US soldier is believed to have been detained by North Korea after crossing the heavily fortified border -- an incident likely to further aggravate Washington's troubled relations with the nuclear-armed state.
Hours later, North Korea fired two short-range ballistic missiles into the sea, according to the South Korean military -- an apparent response to the first visit by an American nuclear-armed submarine to a South Korean port in decades.
The events underscored the diplomatic tightrope being walked by Seoul and Washington in the face of an increasingly assertive Pyongyang. — AFP
North Korea threatens to shoot down any US spy planes violating its airspace and condemns Washington's plans to deploy a nuclear missile submarine near the Korean peninsula.
A spokesperson for the North's Ministry of National Defense says the United States has "intensified espionage activities beyond the wartime level", with "provocative" flights made by US spy aircraft over eight straight days this month, and one reconnaissance plane intruding into its airspace over the East Sea "several times".
"There is no guarantee that such shocking accident as downing of the US Air Force strategic reconnaissance plane will not happen in the East Sea of Korea," the spokesperson says in a statement, carried by the official Korean Central News Agency. — AFP
North Korea has accused a US spy aircraft of violating its airspace and condemned Washington's plans to deploy a nuclear missile submarine near the Korean peninsula.
A spokesperson for the North's Ministry of National Defence said "provocative" flights were made by US spy aircraft this month, with one reconnaissance plane intruding into its airspace over the East Sea "several times".
"There is no guarantee that such shocking accident as downing of the U.S. Air Force strategic reconnaissance plane will not happen in the East Sea of Korea," the spokesperson said in a statement, carried by the official Korean Central News Agency. — AFP
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