Source: Sharecast
The discussions, led by US Treasury secretary Scott Bessent and Chinese vice-premier He Lifeng, were expected to focus on a potential truce extension and wider issues such as Chinese oil imports from Russia and Iran.
Bessent said on Fox Business that he anticipated progress in the talks, which followed a separate agreement between the US and European Union announced over the weekend.
“The record performance in US markets is expected to persist after the EU reached a trade deal with Trump, easing fears of a devastating trade conflict. S&P 500 futures advanced after the index achieved five consecutive all-time highs last week,” said TickMill market strategy partner Patrick Munnelly.
“Contracts for European stocks rose by 1% following the agreement, which implements 15% tariffs on most of the bloc's exports.
“The MSCI All Country World Index hit a new record, while Asian stocks remained unchanged.”
Munnelly noted that markets were recovering from the lows of April, supported by the new trade agreement and optimism that the US and China would extend their truce, reducing fears related to Trump's tariffs.
“This week’s key economic data, along with meetings from the Fed and Bank of Japan, and earnings from major companies will test this confidence and may influence the market and global economic outlook.
“Trump and European Commission president [Ursula] Von der Leyen unveiled the EU agreement on Sunday at his golf club in Turnberry, Scotland, but did not disclose the specific details of the agreement or provide any written documentation.
“This hard-won agreement will impose 15% tariffs on most of the bloc's exports, including vehicles, helping to avoid a trade war that could have severely impacted the global economy.”
Markets mixed as investors eye US-China trade talks
Japan's Nikkei 225 dropped 1.05% to close at 41,020.00, weighed down by a sharp selloff in semiconductor names.
Dainippon Screen Manufacturing fell 9.74%, while Advantest lost 8.96%.
The broader Topix index declined 0.72% to 2,930.73.
Chinese equities ended higher, with the Shanghai Composite edging up 0.12% to 3,597.94 and the Shenzhen Component rising 0.44% to 11,217.58.
Gains were led by smaller tech stocks, including Guangzhou Fangbang Electronics, which jumped 20.01%.
Hong Kong’s Hang Seng Index rose 0.68% to 25,562.13, supported by strength in pharmaceutical stocks.
Sino Biopharmaceutical surged 7.09%, with Hansoh Pharmaceutical and CSPC Pharmaceutical Group also posting strong gains.
Investors also monitored reports that CK Hutchison was seeking a Chinese strategic investor for its ports business bid, in a consortium led by BlackRock.
South Korea’s Kospi 100 climbed 0.74% to 3,242.21, with Samsung Electronics gaining 6.83% after announcing a $16.5bn semiconductor supply deal with Tesla.
Hanwha Ocean and Korea Aerospace also saw strong advances.
Australia’s S&P/ASX 200 rose 0.36% to 8,697.70, lifted by financial and consumer stocks.
Magellan Financial Group added 4.6%, while Premier Investments rose 3.97%.
In New Zealand, the S&P/NZX 50 gained 0.45% to close at 12,910.74, with logistics software firm Eroad surging 9.02%.
In currency markets, the dollar was last up 0.49% on the yen to trade at JPY 148.41, as it gained 0.57% against the Aussie to AUD 1.5317, and climbed 0.7% on the Kiwi to NZD 1.6736.
Oil prices edged higher, with Brent crude futures last up 0.95% on ICE at $69.09 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.95% to $65.78.
China’s foreign direct investment falls in first half
In economic news, foreign direct investment into China declined by 15.2% year-on-year in the first half of 2025, reaching CNY 423.23bn (£44.09bn), according to new government data.
The drop highlighted continued caution among global investors, though certain sectors and regions showed resilience.
China’s manufacturing sector attracted CNY 109.06bn in foreign capital, while the services sector drew a significantly larger share at CNY 305.87bn.
High-tech industries remained a bright spot, accounting for CNY 127.87bn of total FDI.
Within that segment, e-commerce services saw a surge of 127.1%, followed by strong growth in chemical pharmaceutical manufacturing, which rose 53%. Investment in aerospace and equipment manufacturing increased by 36.2%, and medical equipment and devices climbed 17.7%.
Regionally, inflows from ASEAN countries rose by 8.8%, while Switzerland and Japan recorded sharp increases of 68.6% and 59.1%, respectively.
The UK posted a 37.6% rise, Germany gained 6.3%, and South Korea saw a modest 2.7% uptick.
Despite the overall contraction, the figures suggest sustained international interest in China’s high-tech and advanced manufacturing sectors, even as broader investment sentiment remains cautious.
Reporting by Josh White for Sharecast.com.