HSI Edges Up As Asian Markets Remain Hopeful

Hong Kong stocks edged up in the morning session on Tuesday, building on the previous day's rally, as investors remain tentatively optimistic about the China-US trade talks.

The Hang Seng Index rose 0.1 percent, to 28,368 by the break.

On the mainland, the Shanghai Composite Index had gained 0.3 percent, to 2,761, while the Shenzhen Composite Index gained 0.2 percent,to 1,444.

Tokyo finished the morning 0.1 percent higher. Sydney gained 0.5 percent, Singapore put on 0.3 percent and Taipei 0.2 percent, with Seoul flat and Wellington marginally lower.

However, Oanda senior market analyst Jeffrey Halley warned of trouble ahead if Chinese and US officials do not agree a deal.

"The rallies [on Monday] were impressive given the talks ended last week without any concrete results and have yet to even recommence in Washington this week due to the US public holiday," he said.

"Without sounding like a damp squib, there is now a vast amount of 'optimism' baked into currency, stock and energy market prices globally and precisely zero concrete detail. The unwind, should no deal be struck, could be very ugly."

On currency markets the pound was down, with uncertainty fanned by news that seven pro-remain MPs had split from Britain's opposition Labour Party over its handling of Brexit and a row over antisemitism.

The move "looks awfully like a bungled mess of the creation of a new party, which we think is more likely to be pound-negative... by giving Brexit a less effective opposition", said Peter Chatwell, head of European rates strategy at Mizuho International, told Bloomberg News.

He added that it left both main parties "with clear pro-Brexit mandates". (AFP)

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