Asian markets mostly rose on Tuesday with a little more optimism in the air than in recent weeks as China and the US hold trade talks and the US Federal Reserve (Fed) flags a more dovish stance.

Wall Street provided another positive lead, extending Friday’s surge, with Chinese monetary easing at the weekend adding to the buying sentiment.

Focus is now on Beijing, where Chinese and US officials were holding a second day of discussions aimed at resolving their almost year-old trade row.

While there is little expectation this week for a full agreement on the issue, which has seen the two sides exchange tariffs on goods worth hundreds of billions of dollars, there are hopes they can make some headway.

News that China’s top economic negotiator and Vice Premier Liu He was also attending the talks provided some extra support, after US President Donald Trump on Friday said he thought a deal could be done, a sentiment shared by his Secretary of Commerce Wilbur Ross.

“While we don’t expect a full resolution in trade tension between China and the US in the foreseeable future, small steps in progress are likely to be taken favourably by investors,” said Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management.

“The latest positive signals from the Trump administration of prospects of reaching some form of agreement and Vice Premier Liu He attending the negotiations should continue to cheer the market in the near term.”

Hong Kong, which jumped almost three per cent over the previous two days, added 0.2 per cent while Tokyo finished up 0.8 per cent and Sydney added 0.7 per cent.

Samsung warning

Singapore added 0.4 per cent while Wellington and Mumbai rose but Shanghai fell 0.3 per cent, Seoul was off 0.6 per cent and Taipei also slipped 0.3 per cent.

While the mood is somewhat happier than last month, analysts were a little worried by Samsung’s forecast of a near-30 per cent drop in operating profit for the December quarter.

Its US rival Apple sent shudders through markets last week when it warned of a bigger-than-expected drop in revenues owing to falling Chinese demand and highlighting the impact of the trade war.

Samsung finished 1.7 per cent lower.

On currency markets, the dollar saw more selling pressure after Fed boss Jerome Powell said the bank had no “pre-set” plan for raising interest costs and was keeping a close watch on financial developments, fuelling hopes it will slow its pace of hikes.

The greenback was mixed against its major peers but retreated against higher-yielding units including the Australian dollar, Indonesian rupiah, Mexican peso and Russian ruble.

In early European trade London, Paris and Frankfurt each rose 0.1 per cent.