HONG KONG (Nikkei Markets) -- Asian shares outside of Japan jumped Friday after U.S. President Donald Trump's comments lifted hopes of a breakthrough in the ongoing trade talks with China.
The Nikkei Asia300 index rose 1.6% to 1,267.75. Chinese companies were the biggest contributors to the gauge's advance. China Construction Bank added 2.2%, leading mainland lenders higher. China Life Insurance and Ping An Insurance Group advanced at least 2.7% each. Tencent Holdings climbed 1.9%. An index of Chinese companies listed in Hong Kong surged 2.3%, its best performance in more than a month.
Asian equities received a boost from comments by Trump that the negotiations were proceeding "very well" and that he will be meeting Chinese Vice-Premier Liu He on Friday. The comments came amid resumption of high-level talks between U.S. and Chinese officials. A Chinese delegation, led by Liu, spoke with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer yesterday.
Trump's latest comments were a welcome relief for risk assets. Yesterday, a report had indicated that Liu may leave on Thursday, earlier than planned, amid lack of progress on critical issues at deputy level talks.
Michael McCarthy, the chief market strategist at CMC Markets and Stockbroking, said the continuation of trade talks has raised expectations of at least a limited trade deal.
The outcome of the discussions is crucial as a failure to reach a deal would lead to an increase in tariffs on $250 billion of Chinese goods, further aggravating the ongoing trade conflict.
U.S. equities advanced yesterday and the S&P 500 index futures indicated that they could climb more. Treasury yields rose.
In other movers on the A300, Air China, up 5.4%, led a broad rally in mainland airlines on the back of yuan's rise to a three-week high against the dollar. On account of the high dollar debt exposure, Chinese airlines are sensitive to moves on the yuan.
Chinese carmaker BYD added 1.6% amid the broad rally. The company said that sales volume declined by 15% from a year ago last month.
Tata Consultancy Services slid 0.9% after India's biggest software exporter's July-September net profit and revenue growth fell short of estimates. Its peer Infosys, which reports earnings later on Friday, added 4.2%.
Tata Steel added 2.94% after the company said its second-quarter India sales volume increased 5% sequentially.
Singapore Exchange advanced 2.9%. The daily average value of securities traded on Singapore's stock market fell 3% on year and the total securities market turnover for the month increased by 2%, the company said Friday.
-- Nimesh Vora