The mainland Chinese markets, which were offline for much of last week due to the Lunar New Year holidays, saw gains in early trade. The Shanghai composite rose about 0.2% while the Shenzhen component advanced 0.916%. The Shenzhen composite gained 0.922%.
Meanwhile, Hong Kong’s Hang Seng Index remained flat as shares of Chinese tech giant Tencent rose 0.17%.
South Korea’s Kospi slipped more than 0.3% in morning trade, with shares of industry heavyweight Samsung Electronics declining 0.89%.
In Australia, the ASX 200 shed its earlier gains to slip 0.46% in afternoon trade. The heavily weighted financial subindex fell 1.56% as shares of the country’s so-called Big Four banks declined. Australia and New Zealand Banking Group shed 2.05%, Commonwealth Bank of Australia slipped 1.59% , Westpac fell 1.96% and National Australia Bank declined 2.38%.
Investors will be watching for developments on the US-China trade front, with a new round of negotiations set to be held in Beijing later this week.
“The reality is that olive branches, rather than rose stalks, are the best that anyone (anchored to reality) may be looking for,” stated Mizuho Bank in a morning note.
It pointed to “restraints” overhanging these talks.
“First, as of late last week, President Trump had declared that he would not be meeting with President Xi before the deadline (1st Mar) on the US-China trade truce expires,” the note said.
“However, Trump has also categorically stated that there will be no US-China trade deal till he and President Xi have met. Therefore that is as good a guaranteeing that there will be no deal before the US-China truce expires.” That, the note said, not only “contradicts” Trump’s earlier tweets enthusing about a deal in the works, but also “begs the question” of whether that meant higher tariffs on Chinese imports.
Last week, The Wall Street Journal reported that the two countries have not yet put together a draft on the matters they agree or disagree on. The report comes as both Washington and Beijing are attempting to strike a deal on trade before a key early March deadline, following which additional tariffs will be slapped on Chinese imports to the US.
It also follows US President Donald Trump saying on Thursday that he will not meet with Chinese President Xi Jinping before that deadline. White House economic advisor Larry Kudlow also said that there is a “pretty sizeable distance to go” before China and the US reach a deal.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.631 after seeing highs below 96.8 in the previous week.
The Japanese yen traded at 109.78 against the dollar after weakening to lows above 110 last week. The Australian dollar changed hands at $0.7097, following a tumble last week from levels above $0.721 in the previous trading week.