Asian shares climb to three-month peak

Sydney — Asian shares extended gains on Monday to hit a three-month high as risk assets got a fillip from hopes of a US-China trade deal as soon as next month while the dollar marked time as focus shifts to a US rate decision.

In early Asian trades, MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3% for its third consecutive day of gains to 518.29, the highest since late July.

Chinese shares were a tad firmer with the blue-chip CSI 300 up 0.2%. Hong Kong’s Hang Seng index jumped 0.7% while Australian shares climbed 0.1%.

Japan’s Nikkei was also upbeat, rising 0.3% to a decade high.

The gains came after a positive session in US and European markets on Friday.

US and Chinese officials are “close to finalising” some parts of a trade agreement after high-level telephone discussions on Friday, the US trade representative’s office and China’s commerce ministry said, with talks to continue.

US President Donald Trump has said he hopes to sign the deal with China’s President Xi Jinping at a summit in Chile in November.

All-time high

The protracted trade war between the world’s largest economies has hurt manufacturing activity, exports and business confidence globally while denting profits of many major industrial companies.

Optimism that Beijing and Washington were finally close to resolving their dispute led the S&P 500 to surpass its July 26 closing record of 3,025.86, though it ended a tad below that level on Friday. The S&P 500’s total return index posted an all-time high.

E-mini futures for the S&P 500 started firm on Monday, up 0.1%.

Strong results from companies including Intel also boosted sentiment in equities markets. More than 81% of US companies have beaten Wall Street expectations so far this earnings season despite concerns about the trade war.

Investors next await earnings from the likes of Alphabet, Apple, Facebook and Exxon.

Activity later in the week will be dominated by the US Federal Reserve, which markets expect is all but certain to lower interest rates at its Wednesday meeting.

The Bank of Japan meets on Thursday. On Friday, indicators for Chinese and US manufacturing will be released.