Asian stocks rose broadly on Monday, led by the biggest daily gain in Chinese shares in over three years, as funds flooded into the market on the back of the US decision to delay additional tariffs on Chinese goods. The yuan also rose to a seven-month high as tensions eased. Onshore yuan rose 0.6 per cent to 6.6718 yuan per US dollar before softening to 6.6836 yuan in the evening – the strongest level since July 16 last year. Offshore yuan meanwhile rose 0.4 per cent to 6.6730 yuan – its highest level since July 10 last year. China’s Shanghai Composite Index skyrocketed by 5.6 per cent to 2,961.28. That was the largest daily gain since July 2015, the year when a massive market crash wiped out over 23 trillion yuan (US$3.4 trillion) in value. The Shanghai benchmark and the CSI 300 Index – made up of major companies listed in Shanghai and Shenzhen – entered bull markets, with 20 per cent and 26 per cent gains from their January lows respectively. The ChiNext Index of start-ups also entered bull market on Friday. Bull markets require a gain of at least 20 per cent from a recent low. Turnover in Shanghai and Shenzhen topped 1 trillion yuan, a milestone not achieved since November 2015 at the height of the bubble. That was more than three times the average daily turnover over the past three months as of Friday. The dramatic advance could be a pivotal moment for China’s markets, which have been under a cloud since the 2015 market rout and recorded brutal losses of more than a quarter in market capitalisation last year. But traders and analysts have also raised concerns about the rapid pace of the rally and how long it could continue, given that technical indicators such as the relative strength index (RSI) have already pointed to overbuying. Monday’s gains came after Trump said on Twitter that the US had made substantial progress in trade talks with China and will delay imposing additional tariffs that were scheduled to go into effect on March 1. Hong Kong’s Hang Seng Index rose 0.5 per cent to 28,948. It briefly crossed the 29,000 mark, but couldn’t hold onto it. Markets elsewhere in Asia rose as well. In Japan, the Nikkei 225 index edged up 0.5 per cent. South Korea’s KOSPI inched up 0.1 per cent, and Australia’s S&P/ASX 200 rose 0.3 per cent. A front-page commentary on the official China Securities Journal that said financial markets including the stock market will become one of the country’s core competencies also boosted sentiment. “The rally has extended to all sectors, even ones like property and energy that didn’t move much earlier this year,” said Wei Wei, a Shanghai-based trader at Huaxi Securities. Wei said the huge turnover scale suggests strong fund inflow, but to keep up the momentum the market has to hear more good news. “With this kind of turnover, the market is likely to see-saw going forward. There could be a correction as soon as this week,” she said. Foreign investors piling into mainland China stocks – and that’s expected to only grow The relative strength index (RSI) of the Shanghai benchmark has reached 83.6, well above the 70 level that indicates overbuying. Trump said the US and China are planning a summit between President Xi Jinping and himself at Mar-a-Lago to conclude an agreement, if negotiators continue making progress. Financials including insurers and securities brokerages led the advance, driven by renewed hopes for the new tech board and more supportive financial policies. Xi said in at a Politburo meeting that China will push forward reform in the finance sector and further open up the industry. All of the 41 brokerages listed in China surged by the 10 per cent daily limit. The conservatism of Asia’s mutual funds put them in the wrong place to catch 2019’s stock market rally, Goldman Sachs says China Life Insurance, the country’s biggest insurer, lifted the Shanghai Composite Index by the most, with a 10 per cent jump in its stock price. Ping An Insurance climbed 9 per cent. Suppliers to Huawei Technologies led a surge in technology shares, after the telecommunications and electronics giant released its first smartphone with a foldable screen over the weekend. Huawei has also increased its first-quarter camera lens orders by 30 per cent from two suppliers ahead of the debut, the Nikkei Asian Review reported on Friday. Chinese screen maker BEO Technology Group jumped by the daily limit of 10 per cent in Shenzhen to 4.19 yuan. Suzhou Dongshan Precision Manufacturing climbed 5.5 per cent, and Luxshare Precision increased 3.6 per cent. Higher hopes for a resolution to the US-China trade war and the US Federal Reserve’s unexpectedly dovish stance on interest rate have driven up stocks from Wall Street to Shanghai since the beginning of the year, after brutal losses recorded in 2018. The Dow Jones Industrial Average gained 0.7 per cent on Friday, rising for the ninth-straight week. The Shanghai Composite Index has increased 19 per cent since the beginning of this year, while Hong Kong’s Hang Seng Index has recorded a 12 per cent gain. China’s retail investors could be staging a strong comeback soon, as an indicator shows the frequency of internet users’ search for the term “bull market” spiked to the highest level since August 2015, according to search engine operator Baidu. “There is still plenty of room for Hong Kong and China stocks to rise, with more good news expected to come in March,” said Kingston Lin King-ham, director at AMTD securities brokerage. “Market sentiment is great. It’s impossible for the shares to fall now,” he said.