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Asia markets were mixed on Monday afternoon as the U.S. and Canada announced that they had reached a deal to replace the North American Free Trade Agreement.
The Nikkei 225 continued its advance higher by 0.57 percent while the Topix recovered to trade largely flat in the afternoon, as major automakers such as Toyota and Nissan continued to see declines.
The moves in Tokyo came on the back of the release of a survey conducted by the Bank of Japan which showed business confidence among the country’s big manufacturers falling for the third consecutive quarter.
Meanwhile, in South Korea, the Kospi remained lower by 0.31 percent, despite a private survey showing factory activity expanding in September for the first time since March 2018.
Down Under, the ASX 200 slipped by 0.71 percent, with most sectors still trading in negative territory. The heavily weighted financial sector fell by 1.5 percent, with Commonwealth Bank of Australia sliding by 1.55 percent and AMP trading down by 1.88 percent.
The moves in the financial sector Down Under came on the back of an interim report by Australia’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which revealed instances of bribery, fraud, fee-gouging and board-level deception within the sector.
The Chinese and Hong Kong markets are closed today.
On Sunday, a senior U.S. administration official said the United States and Canada had reached a deal to replace NAFTA.
The new deal, which according to the official has been called the USMCA — the United States-Mexico-Canada Agreement, came as negotiators from Ottawa and Washington raced to meet a U.S.-imposed Sept. 30 deadline.
“It’s good news all around,” Debra Steger, a professor at the University of Ottawa, said to CNBC’s Nancy Hungerford this morning.
Terming the deal as one that “happened at the eleventh hour on the last day,” Steger said the new agreement appeared to be a “win-win for all three countries.”
On Sunday, the release of data showed growth in China’s manufacturing sector slowing down in September, with both external and domestic demand weakening. The Caixin/Markit Manufacturing Purchasing Managers’ Index — which focuses on small and medium-sized firms in China — fell to 50.0 in September from 50.6 in August. Economists polled by Reuters had expected a reading of 50.5 on average.
The data comes as the U.S.-China trade war continues to escalate, with new tariffs imposed between the two countries on Sept. 24 and Washington threatening to slap tariffs on virtually all Chinese imports into the United States.
In market action on Wall Street last Friday, the S&P 500 saw its best quarterly gain since the fourth quarter of 2013, rising 7.2 percent. The Nasdaq Composite also saw a 7.1 percent gain for the quarter while the Dow Jones Industrial Average advanced by 9.3 percent. The gains came even though the three indexes closed little changed for the trading day on Friday.
In currency news, the U.S. dollar index which tracks the greenback against a basket of peers was at 95.190 as of 11:51 a.m. HK/SIN, sliding from its earlier high.
The Japanese yen was weaker at 113.88 against the dollar, while the Australian dollar also slipped to $0.7218, as of 11:52 a.m. HK/SIN.
In the oil markets, prices continued to trend higher in the afternoon of Asian trade. The global benchmark Brent crude futures contract remained higher by 0.53 percent at $83.17 per barrel, while the U.S. crude futures contract was higher by 0.38 percent at $73.53 percent per barrel.
— CNBC’s Fred Imbert and Reuters contributed to this report.