HONG KONG, Oct 28 — Asian markets rallied today after China and the US said they were close to agreeing a mini trade deal, while the pound struggled to recover on fresh Brexit uncertainty while EU leaders consider extending a deadline for Britain to leave the bloc.

Investors tracked a strong lead from Wall Street, where the S&P 500 flirted with another record, after the US Trade Representative’s office said the top-level negotiators had held talks Friday and were "close to finalising” an agreement.

And the Chinese Commerce Ministry said both sides agreed to "properly address each other’s core concerns”, fuelling hopes the economic superpowers are on course to a resolution to their long-running and painful tariffs spat.

The two are aiming to get the pact ready to be signed by Donald Trump and Xi Jinping when they meet at next month’s APEC meeting in Chile.

Hong Kong rallied 0.8 per cent and Shanghai ended up 0.9 per cent. The tech-heavy Shenzhen composite index jumped more than one per cent after Chinese state news reported Xi as saying China would boost investment in blockchain technology and speed up its development.

Bitcoin soared more than 15 per cent to nearly US$10,000 (RM41,860) — its highest level for a month — before ticking back slightly.

Tokyo and Seoul each ended 0.3 per cent higher and Sydney was marginally up. Taipei, Bangkok Jakarta and Manila were also higher.

In early trade London dipped 0.3 per cent, while Paris and Frankfurt were both flat. 

Eyes on Fed meeting

However, while the agreement would be a big positive for markets, analysts point out that it is still the first part of a wider deal that could take some time to complete. 

And Ray Attrill at National Australia Bank said: "What’s not yet clear yet is if both sides have agreed that even if the planned December 15 tariff increases won’t go ahead if phase one is agreed, whether there will be any wind back of the higher tariffs imposed on September 1.”

That issue, he said, was "something China was said to be demanding toward the end of last week but we doubt the US is ready to concede on”.

Still, the mood on trading floors is positive and expectations that the Federal Reserve will cut interest rates again at its latest policy meeting this week were also providing support.

Sterling edged up but was generally flat with focus on Westminster, where MPs will vote later in the day on whether to grant Boris Johnson a December 12 general election, which he has called for to break the Brexit deadlock.

With lawmakers refusing to pass his divorce deal before Thursday’s deadline, the prime minister wants a snap poll he hopes will give him a majority of MPs who will push it through parliament.

Also Monday, EU leaders will make a decision on whether to extend the deadline to the end of January and while expectations are for Britain to leave with a deal, Attrill added: "It’s hard to see how this renewed level of uncertainty can be anything other than negative for Sterling given the size of recent gains.”

Key figures around 0820 GMT

Tokyo — Nikkei 225: UP 0.3 per cent at 22,867.27 (close)

Hong Kong — Hang Seng: UP 0.8 per cent at 26,891.26 (close)

Shanghai — Composite: UP 0.9 per cent at 2980.05 (close)

London — FTSE 100: DOWN 0.3 per cent at 7,303.40

Pound/dollar: UP at US$1.2830 from US$1.2823 at 2030 GMT on Friday

Euro/pound: DOWN at 86.32 pence from 86.39 pence 

Dollar/yen: UP at 108.73 yen from 108.67 yen

Euro/dollar: UP at US$1.1092 from US$1.1079

West Texas Intermediate: DOWN 22 cents at US$56.44 per barrel

Brent North Sea crude: DOWN 17 cents at US$61.85 per barrel

New York — Dow: UP 0.6 per cent at 26,958.06 (close) — AFP