Today's Edition
SINGAPORE/SHANGHAI (REUTERS)
Chinese stocks rallied and the yuan strengthened on Monday, after weekend talks in Geneva between Chinese and US officials showed encouraging signs of a de-escalation in a high-stakes trade war.
US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer held long talks on the weekend with senior Chinese officials led by Chinese Vice Premier He Lifeng in Switzerland. Both sides struck a positive note afterwards, with markets awaiting details of any early agreement later in the day.
China's blue-chip CSI 300 Index was up 0.6% at midday break, while the Shanghai Composite Index added 0.4%. Hong Kong's benchmark Hang Seng Index climbed 0.9%.
The yuan strengthened 0.2% against the dollar, while its offshore counterpart was up about 0.3% in Asian trade.
"The weekend talks are better than expected. Both sides are under strong incentives, and pressure, to push forward trade talks," said Charles Wang, Chairman of Shenzhen Dragon Pacific Capital Management Co in Shenzhen.
"But the game will be a long process. Both sides need to determine on areas of concessions and persistence," he added.
Ahead of the talks, US President Donald Trump had signaled punitive tariffs of 145% on China would likely come down and even floated an alternate tariff figure of 80% that he said “seems right”.
China is at the epicenter of Trump's global trade war that has roiled financial markets, upended supply chains and fueled risks of a sharp worldwide economic downturn.
Tensions between the two sides have steadily ratcheted up since Trump's inauguration in January, intensifying after his April 2 "Liberation Day" announcement of sweeping tariffs and Beijing retaliating with equally hefty tariffs on US goods.
China's blue-chip CSI300 Index dropped sharply the week following those tariff announcements but has since recovered. It is now nearly back around the April 2 level.
The Hong Kong benchmark Hang Seng is down 0.3% since April 2. The yuan has benefited from the capital flight from US markets and dollar assets, and is up 0.4% since early April.
Leading gains on Monday, the CSI Defense Index surged 5% and the info tech sub-sector index jumped 0.9%.
In Hong Kong, the Hang Seng Tech Index advanced 1.9% and the Hang Seng Automobile Index gained 2.1%.
