Asian stocks saw significant gains on Friday following news that Chinese tech firm ZTE shares surged early morning. ZTE's gains were a result of the new Italian government's move of approving supply deals with ZTE and Huawei.
According to CNBC, the Shenzhen composite saw gains of 0.355 percent, the Shenzhen component edged up by 0.41 percent, and the Shanghai composite advanced by 0.46 percent. The Hang Seng index also gained 0.56 percent, Japan's Nikkei increased by 0.54 percent, and the Topix index gained 0.17 percent.
The MSCI Asia index saw overall gains of 0.59 percent, led by the Australian S&P/ASX 200 index that advanced 0.52 percent and South Korea's Kospi that closed 0.22 percent higher on Friday's trading.
Analysts said the rallying of Asian markets was propelled largely by news of ZTE's shares surging by 8.78 percent during the firm's final trading hour. Industry experts said they aren't surprised by the surge after the previously contested company saw the Italian government approving special powers for telecommunications deals.
The new government was sworn in on Thursday and said there were "conditions and requirements" imposed on 5G equipment and services with the Chinese firms, Reuters reported.
On the other hand, industry experts see the developments as a positive ordeal for both ZTE and China's biggest tech giant, Huawei. The two companies were previously accused of having equipment that could pose security risks. The firms denied allegations of security threats.
Aside from Asian indexes making big moves, some of China's tech and auto companies also joined the uptrend. According to Xinhua, Chongqing Changan Automobile saw gains of 4.14 percent and the Yangzhou Yaxing Motor Coach went over the daily limit of 10 percent.
Chinese 5G firm Kyland Technology also exceeded the 10 percent daily limit, as more 5G providers in the country followed the lead of ZTE Corporation.
Earlier last month, ZTE shares shed over 9 percent after the U.S. government announced an interim rule that limits the ability of federal groups in acquiring tech equipment from Chinese firms.
A total of five companies were included in the list that the White House released including Huawei, Hikvision, Dahua, and Hantera, KrASIA reported. At that time some industry experts predicted that ZTE shares would continue to suffer.
The U.S. has been urging European countries to ban 5G projects with Huawei and avoid making purchases from ZTE. Italy's new government appears to be open to the idea of working with the said firms as long as the country's regulations are followed.
