SHANGHAI: China stocks extended gains to end higher on Monday, as trade tensions eased after US Treasury Secretary Steven Mnuchin said their trade war with China was put "on hold".
The blue-chip CSI300 index ended up 0.5 percent at 3,921.24 points, while the Shanghai Composite Index closed 0.6 percent higher at 3,213.84 points.
The US trade war with China is "on hold" after the world's largest economies agreed to drop their tariff threats while they work on a wider trade agreement, Mnuchin said on Sunday.
China has agreed to significantly increase its purchases of US goods and services, the two countries said on Saturday, but made no mention of a $200 billion target the White House had touted earlier.
"The US-China agreement should provide investors some relief as a full-scale trade war has been avoided," said Tai Hui, Chief Market Strategist for Asia Pacific, J.P. Morgan Asset Management.
Transport firms, in particular shipping companies, led the rally on the mainland, with Cosco Shipping Holdings closing up 7.4 percent. Analysts said the "ceasefire" of the trade war is positive for shipping demand and port throughput.
Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.22 percent, while Japan's Nikkei index closed 0.31 percent higher.
At 0700 GMT, the yuan was quoted at 6.3859 per US dollar, 0.14 percent weaker than the previous close of 6.3767.
The largest percentage gainers in the main Shanghai Composite index were Inner Mongolia Lantai Industrial Co Ltd up 10.05 percent, followed by Jiangsu Zhongtian Technology Co Ltd gaining 10.04 percent and Hunan Salt Industry Co Ltd up by 10.02 percent.
The largest percentage losers in the Shanghai index were Shandong Tyan Home Co Ltd down 5.01 percent, followed by Harson Trading China Co Ltd losing 4.33 percent and Future Land Holdings Co Ltd down by 3.41 percent.
So far this year, the Shanghai stock index is down 2.8 percent, the CSI300 has fallen 2.7 percent, while China's H-share index listed in Hong Kong is up 5.8 percent. Shanghai stocks have risen 4.29 percent this month.
About 16.45 billion shares were traded on the Shanghai exchange, roughly 116.9 percent of the market's 30-day moving average of 14.07 billion shares a day. The volume in the previous trading session was 13.65 billion shares.
As of 0701 GMT, China's A-shares were trading at a premium of 21.79 percent over the Hong Kong-listed H-shares.
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