U.S. President Donald Trump said on Monday he expected to sign a significant part of a trade deal with China "ahead of schedule," with the signing planned during a summit in Chile next month.
Trump's statements follow remarks by U.S. and Chinese officials last week, saying the two sides were "close to finalising" parts of a trade deal.
Further boosting the sentiment was the U.S. Trade Representative's consideration of extension of tariff suspensions on $34 billion of Chinese goods, which is set to expire on Dec. 28.
The United States Federal Reserve is expected to cut interest rates for the third time this year in its two-day policy meeting beginning Tuesday.
"With easing trade tensions, and better-than-expected results, so far, confidence is building up in the market. And with the rate cut expected from the U.S. Federal Reserve, there is a confluence of factors that is adding to the positive sentiments," said Joel Ng, analyst at KGI securities.
Leading the gains in the region, the Philippine index <.PSI> gained 0.6% on the back of financials.
Index heavyweight SM Prime Holdings and Metropolitan Bank and Trust rose 2.4% and 1%, respectively.
Financials and consumer sector lifted the Malaysian benchmark <.KLSE>, which gained 0.5%. RHB Bank gained 2.9% while Sime Darby Plantation added 2.3%.
Singapore shares <.STI> closed 0.4% up, after hitting their highest in nearly three months earlier in the day.
Index heavyweights Jardine Matheson Holdings and Jardine Strategic Holdings added 3.6% each, while a 2.4% rise in Singapore Exchange Ltd lifted the financial sectors.
Thai stocks swung between positive and negative territory during the session before finishing 0.3% lower amid contracting factory output in September and a lower growth forecast by the finance ministry.
Data by industry ministry showed Thailand's September factory output coming in worse-than-expected, falling 4.7% annually as compared to a 4.4% contraction in August.
On Monday, the finance ministry cut Thailand's 2019 economic growth forecast to 2.8%, and said it expects exports to decline 2.5%. This comes after the United States suspended duty-free trade treatment of Thai imports worth $1.3 billion on Friday.
Utilities and financials firms lost the most, with Global Power Synergy PCL and Kasikornbank PCL losing 8.2% and 3.7%, respectively.
Indonesian stocks <.JKSE> gained 0.25%, rising for a second straight session.
Materials and communication firms were among the top performers with state-owned Telekomunikasi Indonesia rising 1.6% and Indah Kiat Pulp & Paper gained 4.8%.
(Reporting by Sameer Manekar in Bengaluru; Editing by Rashmi Aich)
By Sameer Manekar
