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Stocks in Asia rise as investors await developments on US-China trade

Key Points
  • Major Asian stock markets closed higher.
  • The U.S. and China are set to resume trade negotiations in Washington on Wednesday, following last week's talks in Beijing.
  • A Financial Times report on Wednesday said the two countries are closer to reaching a deal.

Major Asian stock markets closed higher on Wednesday following a report that said the U.S. and China are closer to reaching a trade agreement.

Mainland Chinese stocks closed higher as they bounced from a tepid morning session, with the Shanghai composite adding 1.24 percent to 3,216.30 and the Shenzhen component gaining about 0.78 percent to 10,340.51. The Shenzhen composite advanced 0.824 percent to 1,772.09.

Hong Kong's Hang Seng index gained 1.19 percent, as of its final hour of trading. Shares of Chinese tech giant Tencent jumped 3.44 percent to touch highs not seen since late July last year.

Elsewhere in Asia, the Nikkei 225 in Japan added 0.97 percent to close at 21,713.21 as shares of index heavyweight Fast Retailing soared 5.44 percent. The Topix index rose 0.63 percent.

Over in South Korea, the Kospi gained 1.2 percent to finish at 2,203.27 as chipmaker SK Hynix saw its stock skyrocket 4.58 percent.

Meanwhile, the in Australia rose 0.68 percent to close at 6,285.00. Data on Wednesday showed that retail sales Down Under hit a 15-month high in February, with the country's trade surplus soaring beyond expectations to its second highest on record in the same month.

The broad MSCI Asia ex-Japan index advanced almost 1 percent to 541.16, as of 3:29 p.m. HK/SIN.

Asia-Pacific Market Indexes Chart

The U.S. and China are set to resume trade negotiations in Washington on Wednesday, following last week's talks in Beijing. Ahead of the meeting, White House economic adviser Larry Kudlow said the two countries "expect to make more headway " in this week's talks.

Both economic powerhouses are closer to reaching a deal, according to a Wednesday report from the Financial Times.

Myron Brilliant, executive vice president for international affairs at the U.S. Chamber of Commerce, told reporters that 90 percent of the deal is done, but the final 10 percent remains the trickiest part of the negotiations and would require trade-offs on both sides, according to the Financial Times report.

"There will be a deal done this time," Sean Taylor, chief investment officer of Asia Pacific at DWS, told CNBC's "Street Signs" on Wednesday. "It will be very difficult to implement but it will change sentiment and it will get both parties, you know, back (to) being more pleasant to each other and ... it will get trade going again."

If a deal is reached, he said, the focus would shift toward what he termed the "trade war two" centered around the disputes on technology and intellectual property.

Taylor also noted that it was "ironic that the markets are going up."

"We're now getting downgrades from some of the big global agencies like the IMF on growth and yet the markets are sort of pricing in better news. I think that's quite an interesting point," Taylor said.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.187 after seeing highs around 97.5 yesterday.

The Japanese yen traded at 111.52 against the dollar after seeing highs below 111 earlier in the trading week. The Australian dollar was at $0.7113 after seeing an earlier low of $0.7051.

Oil prices were higher in the afternoon of Asian trading hours. The international Brent crude futures contract gained 0.62 percent to $69.80 per barrel, while U.S. crude futures rose 0.32 percent to $62.78 per barrel.

— CNBC's Fred Imbert contributed to this report.