Most Asian stocks rose on Wednesday, with Chinese markets in the lead after the announcement of trade talks with the U.S. pushed up hopes for a deescalation in an ongoing trade war. 

Other markets were less upbeat, with Indian stocks squarely in focus after a military escalation with neighbor Pakistan earlier in the day. Indian stock futures, however, pointed to a positive open. 

Regional markets took a negative lead-in from Wall Street, which closed lower overnight after U.S. President Donald Trump signaled he was in no hurry to sign any trade deals. But U.S. stock index futures rose in Asian trade after the announcement of trade talks with China, with S&P 500 Futures adding 0.6%. 

Sentiment was also testy before the conclusion of a Federal Reserve meeting later on Wednesday, where the central bank is widely expected to keep rates steady and signal no changes in the near-term. 

Chinese stocks rise, Hong Kong rallies on trade talk cheer 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes added about 0.5% each, while Hong Kong’s Hang Seng blew past its regional peers with a 1.5% rise.

U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet their Chinese counterparts for trade talks when they travel to Switzerland this week, their respective offices said late-Tuesday. 

The announcement marks the clearest signal yet on trade negotiations between Beijing and Washington, after officials from both sides signaled some openness to talks last week. 

But whether this will result in immediate deescalation still remains to be seen, especially as Trump signaled he was in no hurry to sign a trade deal with any country.

Steep trade tariffs between the two countries– following an escalation in their trade war in April– still remained in place. A swathe of recent economic readings also showed both the U.S. and China were facing headwinds from the trade conflict. 

Chinese markets were also encouraged by the People’s Bank cutting a key reserve requirement ratio for local banks, which heralds more monetary stimulus for the economy.

Indian stocks set for strong open despite Pakistan military escalation

India’s Gift Nifty 50 Futures rose 0.5% in morning trade, heralding a positive open for the Nifty 50 even as tensions with Pakistan rose substantially on Wednesday.

India said it had carried out strikes against alleged terrorist encampments in Pakistan early on Wednesday, while Islamabad claimed to have retaliated with artillery strikes, and had also shot down five Indian planes. 

The spike in tensions between the two nuclear armed countries comes after a deadly terrorist attack in India’s Kashmir region last month, which New Delhi blamed on Pakistan. 

The renewed tensions represent the worst fighting between the two countries in over two decades, leaving investors on edge over a worsening in tensions. Indian stocks were also nursing losses in recent weeks on fears of an escalation.

Broader Asian stocks were mildly higher, with investors also skittish before the conclusion of a Fed meeting later in the day. 

Australia’s ASX 200 index rose 0.2%, while South Korea’s KOSPI added 0.4%.

Japan’s Nikkei 225 index rose 0.3%, while the TOPIX index added 0.4%.

Singapore’s Straits Times index shed 0.2%, weighed chiefly by losses in major bank UOB (SGX:UOBH), after it clocked softer-than-expected quarterly earnings.