The Hang Seng China Enterprises Index gained as much as 1.5%, while the CSI 300 Index rose as much as 0.6% during early trading on Monday.
Both indexes are close to recouping their losses since US President Donald Trump’s ‘Liberation Day’ announcement of tariffs on April 2.
The positive opening came after both China and the US reported “substantial progress” in weekend talks, the clearest sign yet that further escalations of the trade war between the two countries can be avoided. But investors and strategists say they will need more details about exactly what progress has been made before they become too bullish.
“We do need to see details and that will allow investors to assess the size of the market impact moving forward,” said Nick Twidale, chief market analyst at AT Global Markets. Still, “the news over the weekend is very positive for Chinese markets in general,” he said.
Read More: US-China trade talks to boost sentiment in Asia, strategists say
Treasury Secretary Scott Bessent said the US would share more details on Monday. Chinese Vice Premier He Lifeng said the two countries have agreed to create a mechanism for further talks, and said they would release a joint statement.
The yuan edged higher against the dollar onshore, while China’s benchmark bonds slipped.
‘Total Reset’
The relatively muted move in Chinese shares may be because markets had already priced in at least some progress during the trade talks.
While neither side announced specific measures over the weekend, both sent a clear message that progress was being made on de-escalating a trade conflict that has spooked global markets and fueled a rush to safe-haven assets. In a social media post over the weekend, Trump called the talks “a total reset negotiated in a friendly, but constructive, manner.”
“It does seem that both sides are more clearly coming to the realization that working together ultimately best serves each nation,” said Gerald Gan, a portfolio manager at Reed Capital Partners.
The rally in China’s stock market was part of a broader move higher across Asia, as traders breathed a sigh of relief following months of tariff-related turmoil. US equity futures also jumped during Asian trading hours, with contracts on the S&P 500 around 1.4% higher.
Chinese stocks were hit hard by Trump’s ‘Liberation Day’ tariff announcements, which led to a series of responses and counter-responses by the two countries. The HSCEI plunged 14% on April 7, as Hong Kong stocks had their worst day since 1997.
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