By Agence France-Presse
Markets rose in Asia on Friday though investors remain cautious as they await developments after the failure of the Trump-Kim summit while also keeping an eye on the stand-off between India and Pakistan.
This picture from North Korea's official Korean Central News Agency (KCNA) taken on February 28, 2019 and released on March 1, 2019 shows North Korean leader Kim Jong Un (L) sitting with US President Donald Trump at the Sofitel Legend Metropole hotel in Hanoi. - The United States and North Korea on March 1 put forward starkly different accounts over the breakdown of a high-stakes summit in Hanoi but offered guarded hope that they could meet again. (Photo by KCNA VIA KNS / KCNA VIA KNS / AFP) / MANILA BULLETIN)
A better-than-expected reading on US economic growth lifted sentiment, while optimistic comments from a top White House economic advisor on the China-US trade talks also provided support.
The gains put the region on course for another strong week despite disappointment over the North Korea talks in Hanoi and renewed tensions in Kashmir.
Shanghai led gains, surging 1.8 percent and extending a rally that has seen it climb by about a fifth since the start of the year thanks to expectations over the trade talks.
Adding to the interest in mainland equities was news that index compiler MSCI will increase the weighting of Chinese-listed stocks in its benchmark indices and nearly double the number of companies included.
With those indices used by global funds for their investments, the move is expected to attract tens of billions of dollars more to the country's markets.
Also Friday, a private gauge showed factory activity in China improved last month and beat expectations, providing hopes for stability in the world's number two economy.
Tokyo climbed one percent thanks to a weaker yen, while Hong Kong added 0.5 percent in the afternoon.
Sydney rose 0.4 percent, Singapore and Wellington each edged up 0.3 percent and Jakarta put on 0.9 percent. Taipei and Seoul were closed for public holidays.
Traders brushed off a negative lead from Wall Street that came after data showed the US economy grew in the fourth quarter at a much slower pace than the previous three months but was much better than forecasts.
'Historic deal'
US President Donald Trump's chief economic adviser Larry Kudlow cheered markets after he told CNBC "progress has been terrific" and while he said there was still work to be done he thought the two sides were "headed toward a remarkable historic deal".
The news soothed worries on trading floors after the US Trade Representative appeared to temper expectations for an agreement.
National Australia Bank's Ray Attrill said the latest remarks had "gone some way to reversing the creeping pessimism about the likelihood of a comprehensive Sino-US trade deal being ready to sign by the two countries’ Presidents later this month".
In forex markets, the dollar held gains against most of its peers after the growth figures were released, though the pound remains supported by easing concerns about a possible no-deal Brexit.
"The market is now moving on the premise that the US-China talks are making progress, and that 'a no-deal Brexit' would be avoided," Resona Bank said in a commentary.
However, it warned: "It should be noted that there are risks that ultimately there may be no deals."
Investors are now awaiting the next moves in the Pakistan-India crisis, which has fuelled worries of a confrontation between the nuclear-armed neighbours.
While they have each looked to play down the threat of war, observers say the limited communication between them widens the scope for misunderstanding.
The breakdown of talks between Trump and Kim Jong Un also surprised, with both sides giving conflicting reasons for the failure, though Pyongyang said they agreed to continue "productive" discussions on denuclearisation.