Asia report: Markets mixed ahead of US-China negotiations

Asian Markets were mixed on Monday with traders in the region closely monitoring the mood ahead of the start of the next round of trade discussions between the US and China, which could prove decisive and bring a protracted period of trade conflict to an end.

US negotiators will travel from Washington to Beijing on Tuesday in an attempt to finalise a deal between the two nations, including formalising some sort of enforcement mechanism, with a White House adviser stating that the US economy's growth could give them leverage over China.

It appeared the long-running saga may finally be reaching its conclusion, with US Treasury Secretary Steven Mnuchin stating that "both sides have a desire to reach an agreement" and adding that negotiations were "getting into the final laps", according to a report from the New York Times.

Nonetheless, Mnuchin reportedly also said that while both countries were nearing a deal, the negotiations were also reaching a point where either an agreement could happen or the whole saga could send without a deal.

The Tokyo Stock Exchange remained closed as the nation enjoys a 10-day national holiday to celebrate the ascension of Crown Prince Naruhito, who will become emperor May 1, though the yen was down 0.13% against the US dollar at JPY111.73.

Following their worst weekly performance since October last week, China's Shanghai Composite index dropped 0.73% to 3,062.50, while the tech-heavy Shenzhen Composite dived by 2.41% to 1,625.62.

The falls came as Star Lake Bioscience Co, Zhangjiagang Freetrade Science & Technology Group and Greattown Holdings all dropped by more than 10% to drag the main Chinese stockmarket gauges lower despite some blue-chip stocks rebounding from the steep losses sustained during the previous week.

On a brighter note, China's National Bureau of Statistics reported a 13.9% jump in Chinese industrial profits during themonth of March to reach 589.52bn yuan following a fall of 14% for January and February combined.

"The financial chain among manufacturers is fragile, and can be easily broken when some manufacturers miss their payments persistently," said analysts at ING.

"We think the government probably sees this risk too, and therefore is likely to continue to use strong credit growth to support small private manufacturers. Having said that, we don't think the 51%YoY loan growth, as seen in March will be seen again in April."

The Hong Kong Hang Seng index went the opposite way from its mainland contemporaries, climbing 0.97% to 29,892.81.

South Korea's Kospi was 1.70% higher at 2,216.43 as electronics giant and index bellwether Samsung climbed by 2.90% ahead of the release of an earnings report on Tuesday, while carmaker Hyundai followed close behind with a rise of 2.58%.

Brent Crude was down 0.98% at $71.45 and WTI fell by 0.67% to $62.88

Down under, the Australian S&P/ASX 200 ended four consecutive days of gains to drop by 0.41% to 6,359.49 as financial stocks weighed on the index ahead of the release of bank earnings reports.

Overall, the biggest fallers were Pilbara Minerals' 6.1% decline, a 5.9% drop from Syrah Resources and a 5.2% fall from Domain Holdings.

Meanwhile, New Zealand's S&P/NZX 50 index was up 0.18% at 10,012.77 as Pushpay led the market higher with a 2.4% jump amid the continued growth of its US business and construction company Fletcher Building rose 2.1% amid speculation that a Tuesday investor update will yield positive news.

Finally, the Australian dollar was up against the greenback by 0.20% at A$1.42, while New Zealand's dollar was up by 0.03% at NZ$1.50.

For later in the week, traders were waiting on South Korean export data and survey compiler's Caixin's manufacturing sector Purchasing Managers Index which were scheduled for release on Wednesday and Thursday, respectively.