Stocks in Asia inch up as investors watch US-China trade developments

Mainland Chinese shares rose in early trade, as the Shanghai composite added 0.74% and the Shenzhen component rose 0.29%. The Shenzhen composite also gained 0.177%.

Over in Hong Kong, the Hang Seng index rose 0.1%.

The Nikkei 225 in Japan rose 0.25%, while the Topix added 0.21%.

Shares of Apple supplier Japan Display soared more than 7% following a Reuters report that the company would supply organic light-emitting diode screens for the Apple Watch later this year.

The supply deal would mark Japan Display’s foray into the OLED display market, Reuters reported citing two sources familiar with the matter. The company currently supplies liquid crystal display screens for the iPhone XR.

In South Korea, the Kospi gained 0.31% as shares of chipmaker SK Hynix added more than 0.6%.

Australia’s ASX 200, however, declined 0.84% as the sectors slipped.

US-China trade hopes

High-level trade negotiations between China and the U.S. resumed on Wednesday in Washington. Hopes were high that both countries were closer to a deal, with U.S. President Donald Trump planning to meet with Chinese Vice Premier Liu He on Thursday in Washington.

White House economic advisor Larry Kudlow told reporters Wednesday that China has acknowledged for the first time that the United States has legitimate gripes about IP theft, forced technology transfer and cyber hacking.

“They have for the first time acknowledged that we have a point. Several points,” Kudlow told reporters at an event hosted by The Christian Science Monitor. Previously, he said, “they were in denial.”

“News that a US-China trade agreement is virtually a done deal has fuelled optimism,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a morning note. “But markets may be converging too quickly on the ‘done’ before the ‘deal.'”

Varathan said there remained “landmines” in the implementation and enforcement of any deal that might emerge, citing examples such as Washington’s demands that Beijing “gives up its right of retaliation” if the U.S. “unilaterally but proportionally imposes tariffs on China’s non-compliance.”

“A deal that needs to be done is not quite the same as a done deal,” he said.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.051 after seeing levels above 97.2 yesterday.

The Japanese yen traded at 111.49 against the dollar as it remained largely range-bound. The trade-sensitive Australian dollar rebounded to $0.7125 from lows of below $0.708 yesterday.

Oil prices were mixed in the morning of Asian trading hours, as the international benchmark Brent crude futures contract was flat at $69.31 per barrel and U.S. crude futures declined 0.11% to $62.39 per barrel.

— Reuters and CNBC’s Lauren Feiner contributed to this report.