NEW YORK: Asian stocks rose along with equity-index futures as record-high US stocks and progress in several trade negotiations boosted risk appetite.

The MSCI Asia-Pacific index advanced 0.3 per cent. The Nikkei 225 index jumped by more than 1.5 per cent after Japan’s top negotiator extended his stay in the US for further talks ahead of a July 9 deadline. Contracts for the S&P 500 index rose 0.3 per cent. The Canadian dollar edged up after the country rescinded digital services tax to advance the US trade talks. Crude oil fell 0.7 per cent as traders wound back risk premiums before the OPEC+ meeting.

A gauge of the dollar dipped 0.2 per cent as Senate negotiations continued over President Donald Trump’s US$4.5 trillion tax-cut package. Chinese shares fluctuated even as factory activity improved for a second month.

On Friday (June 27), US stocks rose to a fresh all-time high for the first time since February, underscoring the conviction the economy is withstanding policy uncertainties. Trump in April put tariffs on dozens of trading partners on pause for three months, providing a boost for equities. A gauge of Asian stocks is set to climb more than four per cent for a second month as investors look past tariff angst and recent tensions the Middle East.

"With the US at all time highs, everyone’s happy. Markets are in a good place,” said Joshua Crabb, head of Asia Pacific equities at Robeco, on Bloomberg Television. "That’s the time to be a little bit more wary. Valuations do matter. Geopolitical issues are still around, tariff negotiations are still ongoing. So I do think one needs to have a degree of caution in the way they’re looking at markets at the moment.”

India’s trade team also extended its stay in Washington to iron out differences as the two sides look to clinch a deal before the July 9 deadline, people familiar with the matter said. Trump also said he doesn’t think he’ll need to extend the deadline.

Canadian Minister of Finance and National Revenue François-Philippe Champagne said that the country would rescind the digital services tax in anticipation of a mutually beneficial comprehensive trade arrangement with US, according to a statement.

Prime Minister Mark Carney and Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21.

"The momentum and trends seen in risky markets portray an almost nirvana environment in which to operate,” Chris Weston, head of research at Pepperstone Group, wrote in a note. Rapid reduction of geopolitical risks and expectations about imminent trade deals are "all adding tailwinds to risk markets.”

Lower-than-expected US inflation and easing uncertainty in trade tensions have helped improve market sentiments. The S&P 500 index has gained ten per cent this quarter, its sixth advance in seven quarters. A gauge of the dollar has tumbled 6.3 per cent this quarter, on pace for its biggest quarterly decline since December 2022.

"The recent conflict in the Middle East is a reminder, both that new policy shocks can surface, but also that unless the worst outcomes materialise, they can create a ‘wall of worry’ for markets to climb,” Goldman Sachs Group Inc. strategists including Kamakshya Trivedi wrote in a note.

Separately, negotiations over Trump’s tax cut bill are continuing as Republicans seek to convince holdouts to support it for final passage, with a vote set to spill into Monday. The nonpartisan Congressional Budget Office estimates the measure would add nearly US$3.3 trillion to US deficits over a decade.

Republicans in Congress broadly support the US$4.5 trillion worth of tax cuts in the package, which extend the 2017 tax cuts and create new breaks for tipped and hourly workers, along with seniors and car buyers. But the US$1.2 trillion worth of spending cuts have created numerous problems.

Trump has not delved into the details of the legislation. Instead, the president has pushed for speed, demanding that Congress deliver the bill to him by July 4. The House will also need to vote on the Senate-passed version before it can go the president’s desk to be signed into law. - Bloomberg