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Asian Markets In Positive Territory On U.S.-China Trade Truce

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Asian stock markets are in positive territory on Monday after U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce on their escalating trade war by halting additional tariffs as the two countries continue negotiations.

At the G-20 summit in Argentina, the U.S. agreed to leave tariffs on more than $200 billion worth of Chinese products at 10 percent on January 1. However, the rate will be raised to 25 percent if the two countries are unable to reach an agreement after 90 days, according to the White House.

The Australian market is notably higher following the positive cues from Wall Street Friday and buoyed by news that the U.S. and China have agreed to a 90-day trade truce between the two countries at the G-20 summit in Argentina.

The benchmark S&P/ASX 200 Index is advancing 77.00 points or 1.36 percent to 5,744.20, after rising to a high of 5,758.60 earlier. The broader All Ordinaries Index is adding 80.50 points or 1.40 percent to 5,829.80. Australian shares tumbled on Friday as financial stocks succumbed to heavy selling pressure.

The major miners are notably higher. Fortescue Metals is gaining more than 4 percent, BHP is rising more than 2 percent and Rio Tinto is advancing 2 percent.

Oil stocks are higher despite a decline in crude oil prices Friday. Santos is gaining more than 5 percent, Oil Search is rising more than 3 percent and Woodside Petroleum is advancing almost 2 percent.

In the banking sector, Westpac, Commonwealth Bank and ANZ Banking are higher in a range of 0.2 percent to 0.8 percent, while National Australia Bank is down 0.2 percent.

Bucking the trend, gold miners are weak after gold prices dipped on Friday. Evolution Mining is down 0.2 percent and Newcrest Mining is declining more than 1 percent.

GrainCorp's shares are gaining almost 27 percent after the grain handler received an all-cash A$2.38 billion buyout offer from asset manager Long-Term Asset Partners.

BlueScope Steel has launched a new A $250 million share buyback after it projected a 10 percent increase in first-half underlying EBIT compared to the preceding half year. The steelmaker's shares are gaining more than 8 percent.

Ansell will shut three production facilities in Mexico and South Korea as the protective glove manufacturer as it pushes to cut its annual expenses by A$30 million a year by 2020. The company's shares are rising more than 3 percent.

The Reject Shop Chairman Bill Stevens has urged the company's shareholders to reject a A$78 million takeover bid, alleging that the Allensford Group, controlled by the Geminder family, was trying to get the retailer "on the cheap". The company's shares are higher by almost 2 percent.

Meanwhile, Metcash reported a 3 percent increase in first-half profit, but projected more tough times for supermarkets and the likely impact of a slowing property market on its hardware business. The wholesaler's shares are losing more than 3 percent.

Nine Entertainment said it will make 144 positions redundant following its merger with Fairfax Media, a move that will affect 92 employees. The company's shares are down 0.6 percent.

In economic news, the latest survey from the Australian Industry Group revealed that the manufacturing sector in Australia continued to expand in November, albeit at a much slower pace, with a Performance of Manufacturing Index score of 51.3. That's down sharply from 58.3, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Australia is also scheduled to see results from a raft of data on Monday. On tap are October figures for building approvals, November data for TD Securities' inflation forecast, ANZ job ads and the RBA's commodity index - plus Q3 numbers for company operating profits.

In the currency market, the Australian dollar is higher against the U.S. dollar on Monday. The local currency was quoted at $0.7367, up from $0.7315 on Friday.

The Japanese market is advancing, with investor sentiment bolstered by the gains on Wall Street Friday as well as on news that Donald Trump and Xi Jinping have agreed to a 90-day truce in the escalating trade war between the two countries.

The benchmark Nikkei 225 Index is rising 286.16 points or 1.28 percent to 22,637.22, after touching a high of 22,677.29 earlier. Japanese shares hit a three-week high in cautious trading on Friday.

The major exporters are higher on a stronger yen. Sony is gaining almost 3 percent and Canon is advancing almost 2 percent, while Panasonic and Mitsubishi Electric are higher by more than 1 percent each.

Among the major automakers, Toyota is rising more than 3 percent and Honda is advancing 2 percent. In the banking sector, Mitsubishi UFJ Financial is adding almost 2 percent and Sumitomo Mitsui Financial is higher by more than 1 percent.

In the tech sector, Advantest is rising almost 3 percent and Tokyo Electron is adding more than 1 percent.

In the oil space, Inpex is up 0.6 percent and Japan Petroleum is advancing almost 2 percent despite lower crude oil prices.

Among the other major gainers, Screen Holdings and Taiyo Yuden are rising almost 6 percent each, while Nippon Yusen, Tokai Carbon and Mitsui OSK Lines are higher by more than 5 percent each.

On the flip side, Chughai Pharmaceutical, Nippon Paper, Sky Perfect JSAT and Kikkoman Corp. are lower by more than 1 percent each.

On the economic front, the manufacturing sector in Japan continued to expand in November, albeit at a slower pace, the latest survey from Nikkei revealed with a manufacturing PMI score of 52.2. That's down from 52.9 in October, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Japan will also release third-quarter data for capital spending and company profits today.

In the currency market, the U.S. dollar is trading in the upper 113 yen-range on Monday.

Elsewhere in Asia, Shanghai, Hong Kong, Taiwan and Singapore are all rising more than 2 percent each, while South Korea is advancing almost 2 percent and Indonesia is higher by more than 1 percent. New Zealand and Malaysia are also higher.

On Wall Street, stocks closed higher on Friday, reflecting optimism ahead of a highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping on the sidelines of the G20 summit in Buenos Aires, Argentina. Ahead of the meeting, Trump offered mixed remarks about the likelihood the U.S. and China will reach an agreement to end the escalating trade dispute between the world's two largest economies.

The Dow climbed 199.62 points or 0.8 percent to 25,538.46, the Nasdaq advanced 57.45 points or 0.8 percent to 7,330.54 and the S&P 500 rose 22.40 points or 0.8 percent to 2,760.16.

The major European markets all moved to the downside on the day. While the French CAC 40 Index edged down by 0.1 percent, the German DAX Index fell by 0.4 percent and the U.K.'s FTSE 100 Index slid by 0.8 percent.

Crude oil prices slipped on Friday as demand growth worries resurfaced after China reported its weakest factory growth in more than two years. WTI crude for January fell $0.52 or 1 percent to settle at $50.93 a barrel on the New York Mercantile Exchange.

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