U.S. President Donald Trump and his Chinese counterpart Xi Jinping could reach a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday.
"This would be a timely shot of confidence for both China and the U.S., especially as manufacturing sentiment in both economies has been languishing of late," Mizuho Bank said in a note.
Shares across broader Asia edged higher, with MSCI's broadest index of Asia-Pacific shares outside Japan rising 0.1 percent for their second straight day of gains.
Leading gains in Southeast Asia, Vietnam stocks climbed 1.1 percent and were on track for a second straight session of gains.
Vingroup JSC, the country's biggest-listed firm by market value, rose 2.1 percent, while Vietnam Dairy Products JSC advanced 0.6 percent.
The Singapore index, which is impacted by any development on the Sino-U.S. trade front due to its high trade exposure, gained 0.7 percent, bolstered by consumer and financial stocks.
Indonesian shares were poised for a second straight session of gains, buoyed by energy and consumer stocks.
Shares of clove cigarettes maker Gudang Garam Tbk PT added 6.9 percent, while coal miner Adaro Energy Tbk PT rose 6.1 percent.
Bucking the trend, Malaysian shares started the day as much as 0.7 percent lower on expectations of a lower January trade surplus.
However, data showed the country posted a better-than- expected trade surplus of 11.5 billion ringgit ($2.83 billion) in January, driven largely by higher shipments of manufactured and mining goods.
Investors largely ignored the data, with the benchmark index paring losses slightly to trade down 0.4 percent at 0409 GMT.
Philippine stocks declined as much as 0.6 percent in early trade on continued fears of fund outflows, after index publisher MSCI said it would increase the inclusion factor of Chinese mainland shares in its global benchmarks. The index pared some of the losses to trade flat by midday.
Southeast Asian markets have come under pressure since the imposition of retaliatory tariffs by the world's two economic giants on each other's goods, which has hurt the Chinese economy and weakened domestic demand of the region's largest trading partner.
(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Shreejay Sinha)
By Shriya Ramakrishnan