China stocks lift as trade negotiators gear up for fresh round of talks

China stocks rose on Monday as U.S. and Chinese trade negotiators geared up for a fresh round of discussions this week, while investor sentiment was lifted after a lacklustre corporate earnings season came to an end. As of midday, the Shanghai Composite index was up 0.8 percent at 2,639.96 points. The index is up almost 5.9 percent so far this year. The blue-chip CSI300 index gained 1.3 percent in the morning session, with the financial sector sub-index higher by 0.3 percent, the consumer staples sector rose 3.4 percent, and healthcare shares climbed 1.9 percent.

The A-share market was closed last week for the Lunar New Year holiday. Meanwhile, U.S. President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal. However, investors stayed optimistic ahead of the next round of trade talks in Beijing, spearheaded on the U.S. side by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, which will focus on issues such as intellectual property rights. Although the two sides will unlikely reach an immediate agreement on these issues, "the market is expecting the deadline to be extended so people are not prepared to be too negative (on share prices) at this point," said Steven Leung, director of sales, UOB Kay Hian in Hong Kong.

There is also relief in the market that "listed companies have completed their disclosure in annual reports before the (Spring) Festival," Wei Yi, an analyst at Kaiyuan Securities wrote in a memo on Monday. Over 300 Chinese listed firms have said they are likely to report full-year losses of over $15 million each, state media said before the holiday. "Bunch of profit warnings (before the Chinese New Year) probably strengthened the base. Those who were not convicted were scared out of the market in that wave," said Alex Wong, director of asset management, Ample Finance Group in Hong Kong. 

China's retailer and catering enterprises earned over $147.5 bln during the Lunar New Year holiday, the country's commerce ministry said late Sunday. Chinese H-shares listed in Hong Kong rose 0.1 percent, while the Hang Seng Index climbed 0.2 percent to 28,009.95 points. The smaller Shenzhen index was up 2.2 percent and the start-up board ChiNext Composite index jumped as much as 3 percent. Shares in Apple Inc's suppliers in Greater China rallied, tracking a robust rebound in the iPhone maker, after the company reported sharp growth in its services business.

MSCI's Asia ex-Japan stock index was weaker by 0.1 percent. The largest percentage gainers in the main Shanghai Composite index were Jiangsu Sinojit Wind Energy Technology Co Ltd and EGing Photovoltaic Technology Co Ltd , which gained as much as 10.2 percent, followed by Hainan Mining Co Ltd, which rose up to 10.1 percent. The top gainers among H-shares were New China Life Insurance Co Ltd, which gained as much as 1.6 percent, followed by China Resources Land Ltd and Guangdong Investment Ltd, both up 1.4 percent.

(With inputs from agencies.)