HONG KONG: Asia markets rose modestly on Tuesday, with investors doubtful of any major breakthroughs in the latest round of US-China trade talks getting underway in Shanghai.
The two-day negotiations in the financial hub will be the first face-to-face discussions since negotiations collapsed in May, when US President Donald Trump accused China of reneging on its commitments.
Washington and Beijing have so far hit each other with punitive tariffs covering more than $360 billion in two-way trade in the year-long dispute.
But little of substance is expected and both sides have worked to lower expectations ahead of the meeting.
"Realistically, this round of talks is about clarifying where the two sides stand after a significant lull in engagement," said Jake Parker, senior vice president at the US-China Business Council.
"There also needs to be a focus on rebuilding trust that was present in April but has since dissipated."
Hong Kong was up 0.1 percent at the close while Shanghai closed 0.4 percent higher.
Huawei reported a 23 percent surge in revenue for the six months to June despite the blacklisting of the Chinese telecom giant by US President Donald Trump on national security concerns.
Tokyo ended 0.4 percent higher, with traders lacking a set of clear trading pegs from a raft of economic data released by the Japanese government before the opening bell.
Entertainment giant Nintendo saw quarterly net profits down 46 percent, rival Sony posted a 33 percent drop, while major air carrier ANA Holdings saw its bottom line profits slip by more than 30 percent on rising costs and a higher tax burden.
Sydney closed up 0.3 percent, just below a nearly 12-year high for the ASX200 blue chip index.
Australian shares have been steadily climbing since January, receiving a boost from lower interest rates and the re-election of the country's ruling conservative government.
Elsewhere in the region, Seoul pared Monday's losses to rise 0.5 percent in the morning, while Taipei was down 0.5 percent.
The Bank of Japan kickstarted several major central bank announcements this week after wrapping up its policy meeting on Tuesday with a status quo announcement.
US Federal Reserve policymakers will also start a two-day meeting later Tuesday amid expectations of the first interest rate cut in a decade.
"Risk appetite will take a cue from how dovish the Fed turns," said OANDA senior market analyst Edward Moya.
"If the Fed remains data dependent, that would be viewed as hawkish and we could see the dollar surge and US equities fall under tremendous pressure."
Market optimism over central bank easing signals saw an uptick in oil futures, with West Texas and Brent benchmarks both up more than 0.5 percent in Tuesday trade.
- Pound pressure -
Meanwhile the pound slipped against the dollar to its lowest levels since early 2017 amid firming expectations of a no-deal British withdrawal from the European Union.
"Prime Minister Boris Johnson said he had no intention of meeting EU leaders in person until they showed a willingness to change their position on the Irish backstop, and withdrawal agreement," said CMC Markets chief analyst Michael Hewson.
"This hard line, so late in the day, appears to have prompted a sudden realisation that a no deal Brexit has suddenly become a much more likely event."
Speculation that Johnson may take the country to the polls later this year could precipitate further falls of at least 10 percent, said National Australia Bank's Ray Attrill.
London extended Monday's gains, rising 0.2 percent in morning trade.
- Key figures around 0820 GMT -
Tokyo - Nikkei 225: UP 0.4 percent at 21,709.31 (close)
Hong Kong - Hang Seng: UP 0.1 percent at 28,146.50 (close)
Shanghai - Composite: UP 0.4 percent at 2,952.34 (close)
London - FTSE 100: UP 0.2 percent at 7699.05
Pound/dollar: DOWN at $1.2164 from $1.2384 at 2100 GMT
Euro/pound: UP at 91.62 pence from 89.86 pence
Euro/dollar: UP at $1.1145 from $1.1128
Dollar/yen: DOWN at 108.61 from 108.66 yen
Brent North Sea crude: UP 41 cents at $64.12 per barrel
West Texas Intermediate: UP 37 cents at $57.24 per barrel
New York - Dow: UP 0.1 percent at 27,221.35 (close)