Chinese stocks uplifted after hopes of easing trade tensions

Chinese shares jumped on Wednesday, rising for a fourth straight session after U.S. President Donald Trump suggested the deadline for Beijing and Washington to strike a trade deal could be pushed back.

The Shanghai Composite index closed 1.8 per cent higher at 2,721.07 points, a level not seen since Oct. 10, 2018. The blue-chip CSI300 index rose 2 per cent to its highest point since late September. Both indices marked their largest daily percentage gains since Jan. 4. The CSI300 financial sector sub-index added 1.9 per cent, the consumer staples sector rose 1.6 per cent, while healthcare shares gained 1.5 per cent.

U.S. President Donald Trump said on Tuesday that he could let the March 1 deadline for a trade agreement with China "slide for a little while", hinting at a possible delay for the first time. Trump's advisers have previously described March 1 as a "hard deadline", after which U.S. tariffs on $200 billion worth of imports from China will rise to 25 per cent from 10 per cent if the two sides cannot reach a deal.

U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer arrived in Beijing on Tuesday for talks with Chinese officials. Discussions among deputy-level officials to work out technical details, including a mechanism for enforcing any trade agreement, started on Monday.

Trade optimism added to improving domestic sentiments seen in recent sessions, paving the way for investors who withdrew to the sidelines when the market slid last year to return, said Zhang Qi, an analyst at Haitong Securities in Shanghai. "Valuations are still relatively low," he said. However, if "there is no clear result from the Sino-U.S. negotiations, external risks such as volatility in U.S. stocks could transmit into China, which could increase the volatility in the stock market," analysts at Chuanchai Securities wrote in a note on Wednesday.

Encouraged by Beijing's commitment to developing core technologies and innovative capabilities to reduce dependence on foreign technology, CSI's information technology index climbed 3.4 per cent, while its All Share Telecommunications Services Index rallied 5 per cent. The smaller Shenzhen index and the start-up board ChiNext Composite index rose 1.9 per cent each.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.6 per cent, while Japan's Nikkei index closed up 1.3 per cent. The largest percentage gainers in the main Shanghai Composite index were Routon Electronic Co Ltd, Deluxe Family Co Ltd and China Galaxy Securities Co Ltd, all up by 10.1 per cent. So far this year, the Shanghai stock index is up 9.1 per cent. The index is above its 50-day moving average and below its 200-day moving average. About 24.4 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 18.4 billion.

(With inputs from agencies.)