China stocks on Wednesday closed at their highest levels since March 2018, aided by more evidence of economic recovery and signs of progress in US-China trade talks.
The blue-chip CSI300 index rose 1.3 percent, to 4,022.16 points, while the Shanghai Composite Index closed up 1.2 percent at 3,216.30 points.
Both indexes ended at their highest levels since late March 2018. Activity in China's services sector picked up to a 14-month high in March as demand improved at home and abroad, a private business survey showed on Wednesday, adding to signs that government stimulus policies are gradually kicking in.
The findings were largely in line with those of an official gauge on the non-manufacturing sector released on Sunday, which showed services activity picked up in March as new orders rose more quickly. Construction, in particular, showed strength, likely reflecting government efforts to fast-track more infrastructure projects to kindle domestic demand. China's central bank is expected to cut banks' cash reserve requirements again soon to bolster financial system liquidity as it looks to support the slowing economy, analysts said, as market speculation over another policy move grows.
Investors also cheered the progress in Sino-US trade talks.
The United States and China "expect to make more headway" in trade talks this week, White House economic adviser Larry Kudlow said on Tuesday.
"Recent positives such as the US Federal Reserve pausing their interest rate increases, incremental signs of progress on China-US trade negotiations and a dovish bias from China's PBoC to support growth have given investors a sunnier attitude about risk assets," said Tai Hui, chief market strategist, Asia Pacific, J.P. Morgan Asset Management. Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.93 percent, while Japan's Nikkei index closed up 0.97 percent.
At 07:14 GMT, the yuan was quoted at 6.7089 per US dollar, 0.2 percent firmer than the previous close of 6.7225. So far this year, the Shanghai stock index is up 29 percent and the CSI300 has risen 33.6 percent, while China's H-share index listed in Hong Kong is up 15.4 percent. Shanghai stocks have risen 4.06 percent this month. About 43.05 billion shares were traded on the Shanghai exchange, roughly 104.4 percent of the market's 30-day moving average of 41.24 billion shares a day. The volume in the previous trading session was 44.71 billion.
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