Asian markets kicked off a busy week by gaining in early trading Monday, after comments Friday that the U.S. and China were close to reaching a “phase one” trade deal.
The U.S. Trade Representative’s office said that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin spoke with Chinese Vice Premier Liu He on Friday and will speak again soon, and that the two sides are close to finalizing parts of a deal.
U.S. officials have said they hope to sign a deal in mid-November. China is reportedly seeking a pause in new tariffs; the next round of U.S. tariff hikes against Chinese goods is set to take effect Dec. 15.
“It’s been a tranquil start to a potentially eventful week,” Stephen Innes, Asia-Pacific market strategist for AxiTrader, wrote in a note, pointing out that the coming week includes potentially market-moving events such as meetings by the U.S. Federal Reserve and the Bank of Japan, Brexit developments, and the busiest week of Wall Street’s earnings season.
“Behind [recent] doom and gloom, however, short-term investors are smelling a reversal in risk sentiment as even a mini U.S.-China trade deal together with the removal of the no-deal Brexit risk could trigger a decisive turn in sentiment,” he wrote.
Japan’s Nikkei advanced 0.3% and Hong Kong’s Hang Seng Index rose 1.2%. The Shanghai Composite gained 0.7% and the Shenzhen Composite surged 1.3%. South Korea’s Kospi gained 0.4%, while benchmark indexes in Taiwan and Indonesia advanced. Australia’s S&P/ASX 200 edged up 0.2%. Markets in Indonesia, Malaysia and New Zealand were closed for holidays.
Among individual stocks, robotics maker Fanuc gained in Tokyo trading, along with Honda and Sony . In Hong Kong, Geely Automobile surged, while AIA Group and Sunny Optical posted strong gains. Kia Motors sank in South Korea, while BHP and Rio Tinto rose in Australia.