Asia markets advance as investors digest US-China trade developments
Japan's Nikkei 225 edged up by 0.31 percent, or 72.01 points, to 23,002.37, crossing the 23,000 mark for the first time since February as the dollar firmed against the yen. The Topix dipped in and out of negative territory before finishing lower by 0.08 percent, with declines seen in insurers and steelmakers while machinery sector stocks climbed.
Over in South Korea, the Kospi reversed early losses, advancing 0.2 percent to close at 2,465.57.
Greater China markets got a lift following positive trade developments at the weekend. Hong Kong's Hang Seng Index advanced 0.68 percent by 3:22 p.m. HK/SIN, but was below its intraday high. Utilities and industrials led the climb ahead of the market close.
Stocks Down Under bucked the trend, with the S&P/ASX 200 slipping 0.05 percent to close at 6,084.50 as materials and financials weighed.
On the whole, MSCI's index of shares in Asia Pacific excluding Japan edged higher by 0.1 percent in Asia afternoon trade.
U.S. puts 'trade war on hold'
Both countries said they had agreed to "substantially reduce" the U.S. trade deficit with China in a joint statement on Saturday. According to the statement, China would significantly increase its purchases of U.S. goods and services, although it remained unclear how much that would amount to.
"Overall, markets should view this positively at the open this week, but will continue to be attentive to further developments," ANZ analysts said in a morning note.
Although Mnuchin's pronouncement was an incremental positive, there were also other moving parts at play in markets, said Jonathan Garner, chief Asia and emerging markets equity strategist at Morgan Stanley.
Higher oil prices were "negative for most of Asia, which is a large oil importer ... We also have a situation where monetary policy continues to tighten in the U.S. and China simultaneously, and that's an issue that's certainly causing pressure on valuations, particularly in equities," Garner told CNBC's "Squawk Box."
U.S. stock index futures, meanwhile, were higher on Monday following Mnuchin's comments, with the implied open for the Dow Jones industrial average more than 200 points higher during Asia morning trade. S&P 500 and Nasdaq futures also pointed to gains.
Stock indexes stateside had closed mostly lower on Friday as investors digested trade-related headlines ahead of the joint statement issued at the weekend. The declines also came as U.S. Treasury yields rose to multiyear highs last week.
On Monday, the yield on the benchmark 10-year U.S. Treasury note edged up to 3.07 percent after easing slightly in the Friday session. The 10-year yield had surpassed 3.1 percent for the first time in around seven years last week.
The dollar index, which tracks the U.S. currency against its peers, stood at 94.021, compared to levels around the 93.7 handle seen on Friday. Against the yen, the greenback traded at 111.30 at 3:17 p.m. HK/SIN as U.S.-China trade tensions were seen to have abated slightly.
In individual movers, shares of LG Electronics closed higher by 0.71 percent following news on Sunday that the chairman of LG Group, Koo Bon-moo, had passed away. Koo's son is expected to be nominated to the company's board as part of succession plans, Reuters said. Other LG affiliates traded lower, with LG Display declining 1.1 percent and LG Chem down 1.6 percent.
Europe closes higher as trade war concerns ease; Italian stocks lower
Market sentiment was driven by trade news and political events in Italy. Fears over a trade war between the U.S. and China eased after comments from U.S. Treasury Secretary Steven Mnuchin that both countries are putting the trade war "on hold" as they tried to reach a compromise. On Wall Street, stocks traded sharply higher amid the alleviation of trade tensions.
Political instability in Italy seems to be coming to an end with a power-sharing agreement between the left-wing Five Star Movement and the right-wing Lega. Both parties are due to present their deal to the country's president later on Monday. However, such a government could raise concerns across the euro zone due to planned higher spending. French Finance Minister Bruno Le Maire warned Sunday that Rome needs to respect European spending rules, according to the Financial Times.
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Altice was among the worst performers, down by more than 7 percent, after the MSCI deleted it from the global standard indexes, effective on May 22, Reuters reported.
There are no major data releases on Monday.
Dow closes nearly 300 points higher as US-China trade war is placed 'on hold'
The Dow Jones industrial average jumped 298.20 points to 25,013.29. Boeing, Caterpillar and United Technologies, big exporters likely to benefit from easing trade tensions, were the best-performing stocks in the index . Monday also marked the first time since mid-March that the Dow closed above 25,000.
The S&P 500 gained 0.7 percent and closed at 2,733.01 as industrials jumped 1.5 percent. The Nasdaq composite climbed 0.5 percent to 7,394.04 as semiconductors pushed tech higher.
Treasury Secretary Steven Mnuchin said over the weekend the prospect of a trade war was "on hold" following an agreement to suspend tariff threats.
On Saturday, negotiators from the world's two largest economies said they would continue talking about measures under which Beijing would import more energy and agricultural commodities from the U.S. in an effort to bridge the $335 billion annual U.S. goods and services trade deficit with China.
Mnuchin told CNBC on Monday the U.S. has made "very meaningful progress" with China on trade matters. "Now it's up to both of us to make sure that we can implement it," Mnuchin told "Squawk Box."
Trump touted the deal, tweeting: "China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products - would be one of the best things to happen to our farmers in many years!"
Futures rose sharply on the news as worries of a trade war between the two countries in the world decreased. Trade tensions between the U.S. and China kept a lid on stocks last week, as the major indexes slipped.
"In our view the fundamentals remain attractive for further upside in equities stateside and globally in the months ahead so long as progress persists in trade talks with China," said John Stoltzfus, chief investment strategist at Oppenheimer Asset Management.
Wall Street also got a boost Monday amid a slew of dealmaking news.
General Electric will merge its transportation business with Wabtec — a rail equipment maker — in a deal worth $11.1 billion. GE shares rose 2 percent.
Meanwhile, Fifth Third Bancorp agreed to buy MB Financial for $4.7 billion in cash and stock. MB Financial shares surged 12.9 percent.
Elsewhere in corporate news, Micron jumped 3.3 percent after the company raised its guidance because of a "healthy" semiconductor industry.