Stocks in Asia edged up on Tuesday as investors watched closely for developments on the U.S.-China trade war following a recent escalation.
Mainland Chinese stocks rose on the day as they led gains in the region, with the Shanghai composite adding 1.35% to around 2,902.19 and the Shenzhen component gaining 1.86% to 9,443.18. The Shenzhen composite advanced 1.867% to about 1,595.82. Hong Kong's Hang Seng index, bucked the overall trend regionally to slip about 0.3%, as of its final hour of trading.
Overall, the MSCI Asia ex-Japan index rose 0.26%.
Investors watched for further developments on the ongoing trade war between Beijing and Washington. U.S. President Donald Trump said Monday that American trade officials received overnight calls from the Chinese saying Beijing was ready to return to the negotiating table.
On the part of the Chinese, however, Foreign Ministry spokesman Geng Shuang said he was unaware that a phone call between the two parties had occurred. That was further backed by Hu Xijin, editor-in-chief at Chinese state-run newspaper The Global Times, who said in a tweet Monday: "Based on what I know, Chinese and US top negotiators didn't hold phone talks in recent days."
Those developments came following a recent intensification in tensions, with both China and the U.S. announcing that new tariffs will be slapped on billions of dollars worth of each others goods.
"President Trump's continued escalation of tensions gives little room for China (or indeed the US) to compromise without losing face, which makes a deal less likely in the near term," Tapas Strickland, an economist at National Australia Bank, wrote in a morning note.
It's "clear" that Trump and his administration still want to get a deal with China, if it "meaningfully addresses some of the concerns" raised surrounding issues such as forced technology transfer and intellectual property theft, Clete Williams, partner at Akin Group, told CNBC's "Squawk Box" on Tuesday.
"That said, I do think you're seeing the president say one thing on Friday, something else today," Williams said. "A lot of folks are trying to understand that, my advice to them is stay calm, don't read into every single comment. If you can't stay calm, bet on volatility because you're gonna see a lot of ups and downs and back and forth between now and when a deal ... is reached."
The Chinese yuan was closely watched on Tuesday, after offshore trading of the currency touched a record low on Monday amid the trade turmoil. It last traded at 7.1750 per dollar.
The official midpoint reference for the onshore yuan by the People's Bank of China was set at 7.0810 against the dollar, a fresh 11-and-a-half year low but still stronger than expected, Reuters reported. The currency last traded at 7.1613.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.956 after seeing an earlier high of 98.054.
The Japanese yen traded at 105.65 against the dollar following a weakening from levels below 105 in the previous session. The Australian dollar changed hands at $0.6749 after rising from levels below $0.672 yesterday.
Oil prices rose in the afternoon of Asian trading hours, with the international benchmark Brent crude futures contract adding 0.26% to $58.85 per barrel and U.S. crude futures gaining 0.24% to $53.77 per barrel.