Market Caution As U.S.-China Trade Talks Extend

China and Hong Kong stock markets observed marginal gains on Tuesday, reflecting investor optimism as they await results from high-stake U.S.-China trade discussions in London. Meanwhile, weak economic indicators from China have spurred expectations of additional stimulus measures from Beijing.

Discussions between top economic officials from China and the United States have extended into a second day. The aim is to resolve a contentious dispute that spans tariffs to rare earth trade restrictions, which could potentially lead to widespread supply chain disruptions and hinder global economic growth.

The ongoing trade negotiations, now addressing intricate matters like rare earths and semiconductors, have resulted in cautious market behavior. Investors are adopting a wait-and-see approach amidst China's plummeting exports to the U.S. and rising domestic deflationary pressures, compounded by new government guidelines aimed at economic stimulation.

(With inputs from agencies.)