Chinese shares climb ahead of Trump-Xi summit

China's stock markets rallied on Monday, anticipating a potential trade truce between the United States and China. Presidents Donald Trump and Xi Jinping are set to meet this week, with investors hoping the summit will extend the recent agreement. The Shanghai Composite index climbed 0.6% to 3,933.37 points, while the CSI300 index increased 0.4%.

The tech-focused STAR50 index rose by 0.4%, and the AI-focused CSI AI Index added 1.1%. US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng concluded talks in New York on Sunday, proposing a new AI safety notification mechanism ahead of the summit. Analysts at Goldman Sachs believe both sides aim to maintain relative stability in US-China relations, though a comprehensive bilateral deal seems unlikely.

The real estate sector surged 4.6%, and the defense sector gained 1.7%. Healthcare stocks rose over 3% following a Reuters report that the US is developing rules for pharmaceutical companies investing in China, likely preserving their licenses for most Chinese drug deals. Hong Kong's Hang Seng Index also climbed 0.6% to 24,891.58, with the Hang Seng Tech Index remaining steady.

Asian markets ticked higher on Monday, buoyed by chipmaker gains, while oil prices dipped slightly due to reports suggesting more oil was exiting the Middle East than initially anticipated, despite ongoing conflict in the region.