Asia markets live: Stocks rise

Asia-Pacific markets rallied Monday after China and the U.S. announced a trade deal, including a 90-day pause on tariffs and a drop in reciprocal tariffs by 115 percentage points.

“The magnitude of this tariff reduction is larger than expected,” Tai Hui, APAC Chief Market Strategist at J.P. Morgan Asset Management, noted.

“This reflects both sides recognizing the economic reality that tariffs will hit global growth and negotiation is a better option going forward. The 90-day period may not be sufficient for the two sides to reach a detailed agreement, but it keeps the pressure on the negotiation process,” he wrote in a Monday note.

Hui also added that investors would still be awaiting “further details on other terms of this agreement, for example, whether China would relax on rare earth export restrictions.”

Hong Kong stocks led gains in the region with the Hang Seng Index surging 2.98% to end the day at 23,549.46, its highest level since March 27 while the Hang Seng Tech index advanced 5.16% to 5,447.35, its highest since March 28.

Meanwhile, mainland China’s CSI 300 index increased 1.16% to end the day at 3,890.60.

Indian stocks also saw massive gains following the ceasefire between India and Pakistan over the weekend. The arch rivals were involved in intense firing — the worst in nearly three decades — with both sides exchanging fire with missiles and drones.

The benchmark Nifty 50 surged 3.49% while the BSE Sensex gained 3.38% as of 2 p.m. local time.

Japan’s benchmark Nikkei 225 ended the day 0.38% higher at 37,644.26 while the broader Topix index added 0.31% to 2,742.08.

In South Korea, the Kospi index advanced 1.17% to close at 2,607.33 while the small-cap Kosdaq moved up 0.4% to 725.40.

Over in Australia, the benchmark S&P/ASX 200 pared gains to end the day flat at 8,233.50.

Markets have been retracing the “totality of their correction experienced in the first ten days of April,” following the pause in the U.S.’ tariffs on imports, Jean-Louis Nakamura, head of conviction equities at asset management house Vontobel said.

While there is no clarity on how the global economy — and the U.S. and Chinese markets — will be impacted by the duties, Nakamura believes that more clarity will come in the next two months.

“We might attend a tug of war between pre-announcements of more sustainable and comprehensive agreements, closer to the initial starting situation, and hard data suggesting a rapidly deteriorating internal demand in the U.S. and exports dynamic in China. If the latter come first, markets should experience another large bout of volatility,” Nakamura wrote in a Monday note.

U.S. futures jumped after the details of the trade deal between the U.S. and China were released.

All three key benchmarks on Wall Street declined in last Friday’s session.

The 30-stock Dow Jones Industrial Average lost 119.07 points, or 0.29%, and settled at 41,249.38. Meanwhile, the broad-based S&P 500 inched down 0.07%, closing at 5,659.91, while the Nasdaq Composite ended the session little changed, ending at 17,928.92.

— CNBC’s Yun Li, Fred Imbert, Pia Singh and Brian Evans contributed to this report.