BENGALURU, India: Asian shares climbed on Monday (Oct 20), lifted by hopes of a thaw in US-China trade relations after both sides agreed to restart talks "as soon as possible," easing investor jitters and helping drive South Korean and Taiwanese equities to record highs.
Equities in Seoul and Taipei led the rally, each jumping more than 1.3 per cent to record highs. Markets in Seoul are on track for a fourth consecutive day of gains, buoyed by optimism around a potential US$350 billion trade pact with Washington that could include investment flows and currency support measures.
MSCI's broadest index of Asia-Pacific shares outside Japan added 1.6 per cent in value. South Korea's chief policy adviser said on Sunday that he sees a higher chance of clinching the deal by the time of the Asia-Pacific Economic Cooperation (APEC) summit later this month.
While the US and China remain locked in a fragile truce, US President Donald Trump struck a more conciliatory tone late Friday, saying he expects a "fair deal" with Beijing and reaffirming plans to meet his Chinese counterpart Xi Jinping at APEC.
Westpac analysts noted in a client note that the recent escalation appears to be "strategic posturing" ahead of China's plenum and the Trump-Xi meeting, adding that "China-exposed growth assets can breathe a little easier for now".
China, South-East Asia's largest trading partner, also reported better-than-expected third-quarter GDP growth, beating forecasts and suggesting resilience despite property sector headwinds and trade frictions. The data, alongside stronger industrial output and retail sales, helped shore up regional risk appetite.
In Japan, Nikkei surged to a record high after political negotiations appeared to put fiscal expansionist Sanae Takaichi on a clearer path to becoming the country's next prime minister.
Among other regional markets, Indonesia's benchmark index jumped as much as 1.88 per cent, its sharpest intraday gain since August 12.
Bangkok shares rose more than one per cent, while Manila and India added more than 0.5 per cent each.
Singapore's STI was the sole laggard, slipping 0.6 per cent.
Asian currencies were broadly steady against a softer US dollar, with the Taiwan dollar and South Korean won rising over 0.2 per cent each, while others lacked momentum.
Investors are likely to shift focus to central bank decisions this week.
Bank Indonesia is expected to cut its policy rate by 25 basis points to 4.50 per cent on Wednesday, followed by a similar move from the Bank of Korea, which is projected to lower its base rate to 2.25 per cent on Thursday. - Reuters
