Asian equity markets started the week positively, driven by renewed optimism about U.S. China trade negotiations. Traders responded favorably to a modest return in mainland China trading following holidays. The Shanghai Composite rose by 0.8%, while the CSI 300 increased by 0.9%.

Chinese Equities Lead Growth

U.S. Treasury Secretary Scott Bessent’s comments about potential trade progress bolstered investor confidence. The positive sentiment followed signals from Washington and Beijing indicating a less aggressive trade stance. Former President Trump referred to ongoing negotiations aimed at ensuring fair deals, while China expressed willingness to engage, focusing on tariff rollbacks.

Market Focus Shifts to Economic Data

Despite the upbeat mood, investors remain cautious, awaiting key macroeconomic indicators. China’s recent Caixin Services PMI fell short of estimates, creating uncertainty about consumer and service sector recovery.

Upcoming reports on China’s trade balance and consumer price index are critical this Friday, potentially revealing more about domestic demand and inflation trends that are vital for evaluating further stimulus from Beijing.

With trading volumes light due to continuing regional holidays and an upcoming U.S. Fed meeting, Asian markets remain sensitive to developments in U.S.-China relations, which could boost sentiment across emerging markets.