SEOUL, South Korea (AP) — Asian markets erased early losses, bouncing back Friday back as investors responded with calm to increased U.S. tariffs on Chinese imports that took effect midnight Washington time.
Shanghai stocks jumped 0.5 percent while Hong Kong's Hang Seng surged 0.9 percent as the uncertainty ended over whether Washington would escalate tensions with Beijing.
Upbeat economic data and overnight gains on U.S. stock markets helped temper concerns, though trading volume was light.
After falling as much as nearly 1 percent, China's Shanghai Composite Index rose 0.6 percent to 2,750.72. The Shanghai benchmark had languished recently, losing more than 12 percent over the past two weeks.
Hong Kong's Hang Seng index gained 0.8 percent to 28,409.37, while South Korea's Kospi added 0.7 percent to 2,273.77. But markets in Taiwan, Singapore and other Southeast Asian countries were lower.
Tokyo's Nikkei 225 jumped 1.3 percent to 21,826.29 in what appeared to be a technical rebound after a four-day losing streak. Australia's S&P-ASX 200 rose 0.8 percent to 6,266.60.
"The market actually is acting very calmly," said Francis Lun, chief executive of GEO Securities Ltd. in Hong Kong. "But of course, the talk of a trade war already depressed the market for about 1,000 points in the past month already."
As of Friday, the U.S. imposed a 25 percent tariff on $34 billion worth of Chinese imports.
China said it would have to make a "necessary counterattack" but gave no details. It has been expected to strike back with tariffs on a similar amount of U.S. exports including soybeans.
"The Trump administrations trade war is finally upon us," said Stephen Innes, Asia-Pacific head of trading at OANDA. "If this moves off the tit-for-tat battleground into a full out trade war, it will not only threaten market stability but could compromise relations between Washington and Beijing."
Overnight, Wall Street finished higher on Thursday, a day after the Independence Day holiday, led by gains in tech and health care companies. Upbeat U.S. economic data helped as reports showed U.S. service firms expanding at a surprisingly strong pace in June.
The S&P 500 index rose 0.9 percent to 2,736.61. The Dow Jones Industrial Average gained 0.8 percent to 24,356.74. The Nasdaq composite added 1.1 percent to 7,586.43. The Russell 2000 index of smaller-company stocks picked up 1.1 percent to 1,679.48.
Benchmark U.S. crude added 9 cents to $73.03 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.20, or 1.6 percent, to settle at $72.94 per barrel Thursday. Brent crude, used to price international oils, lost 14 cents to $77.25 per barrel in London. It slid 85 cents, or 1.1 percent, to close at $77.39 per barrel on Thursday.
The dollar strengthened to 110.77 yen from 110.60 yen while the euro rose to $1.1692 from $1.1691.