Asia markets and U.S. futures surge on US-China trade deal; easing India-Pakistan tensions boost sentiment

Asia stock markets traded higher on Monday following substantial progress in U.S.-China trade talks on Sunday. Traders awaited further details from the negotiations, which were expected to be announced on Monday. Still, the upside was tempered by weak April CPI/PPI data from China, where consumer prices fell for the third month and producer prices posted their steepest drop in six months. Easing geopolitical tensions also lifted sentiment, with a fragile ceasefire holding between India and Pakistan, and Ukrainian President Zelenskiy showing willingness to meet Russia’s Putin in Turkey this week. Gold slipped over 1% to around $3,260 on Monday, hitting a one-week low, as optimism over US-China trade talks dampened demand for safe-haven assets. Japan ( NKY:IND ) rose 0.39% toward 37,600 while the broader Topix index gained 0.4% to 2,744 on Monday, with Japanese shares scaling six-week highs. The Japanese yen weakened past 146 per dollar on Monday, marking a fresh one-month low as optimism over US-China trade negotiations. Investors also kept a close eye on ongoing trade talks between the US and Japan, with Tokyo aiming to secure a deal by June. On the domestic front, Japan recorded a current account surplus of JPY 3.45 trillion in March, following a record JPY 4.06 trillion surplus in February. The gauge for Japan’s service sector fell to 42.6 in April 2025 from 45.1 in the previous month, marking its lowest level since February 2022 and the fourth consecutive month of decline. The value of loans in Japan increased 2.4% year-on-year in April 2025, slowing for the second straight month and missing market expectations for a 2.8% gain. China ( SHCOMP ) rose 0.51% to around 3,350, while the Shenzhen Component surged 1.2% to 10,250 on Monday, extending last week’s gains as optimism over progress in US-China trade talks outweighed mounting deflationary pressures at home, the offshore yuan strengthened around 7.23 per dollar on Monday, after Friday’s muted session. Meanwhile, April’s inflation data underscored persistent economic weakness, with consumer prices down 0.1% year-on-year for the third month and producer prices falling 2.7%, the fastest drop in six months. Hong Kong ( HSI ) rose 1.11% to 23,188 in early Monday trade, marking the eighth straight session of gains and notching their highest level in 1-1/2 months. India ( SENSEX ) rose 2.71% surged 1,922 points, or 2.4%, to 81,377 in early trading on Monday, halting losses from the previous two sessions and hitting the highest level in nearly five months, as India and Pakistan reached a truce over the weekend following four days of cross-border firing. Australia ( AS51 ) rose 0.09% to 8,276 in Monday morning trade, gaining for the fourth session. The Australian dollar rose above $0.642 on Monday, rising for the second straight session. In the U.S., on Friday, all three major indexes ended near the flatline on Friday as investors looked ahead to high-stakes trade negotiations between the US and China in Geneva this weekend. U.S. stock futures jumped on Monday after the Trump administration announced a breakthrough trade agreement with China, following weekend negotiations in Switzerland: Dow +1.07% ; S&P 500 +1.44% ; Nasdaq +1.95% . Investors are also eyeing key economic data this week, including US consumer inflation figures on Tuesday, followed by retail sales and producer price index data on Thursday, as they assess the early economic impact of the trade conflict. Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Trump set to unveil trade deal with UK on Thursday – report China service growth hits 7-month low as trade disruptions weighs on new business orders Australia private sector expands at 51 in April, services sector expands for 15th straight month Australia inflation gauge eases slightly in April by 0.6% Australia Q1 producer price inflation beats estimates; retail sales rises 0.3% in March

Source: Seeking Alpha