HK Stocks Rally As Investors Shed Trade War Fears

Hong Kong stocks climbed more than 1 percent on Monday as concerns over a potentially catastrophic China-US trade war abated.

The Hang Seng Index added 1.3 percent, to close at 30,229.

The benchmark Shanghai Composite Index climbed 0.2 percent, to 3,138 while the Shenzhen Composite Index ended up flat, at 1,831.

Most other Asian markets also rose on cautious optimism. Tokyo ended 0.5 percent higher, Hong Kong climbed more than one percent, Shanghai was 0.2 percent up and Sydney put on 0.4 percent.

Singapore was 0.2 percent higher, Seoul gained 0.6 percent and Wellington added 0.7 percent, while Taipei, Bangkok and Jakarta also rose.

Investors will be keeping a close eye on comments Tuesday by Chinese President Xi Jinping at the Boao Forum -- dubbed the Asian Davos -- to see if he comments on the brewing row.

Greg McKenna, chief market strategist at AxiTrader asked: "Will Xi crank the handle on rhetoric or will he strike a more conciliatory tone?"

The dollar held up against its main peers, with yen traders awaiting Bank of Japan governor Haruhiko Kuroda's speech later in the day as he starts his second term.

Oil prices rose on bargain-hunting following last week's losses, but analysts warned of further volatility caused by the trade dispute uncertainty. (AFP)