Updated October 22, 2019 12:16:28

Photo: Investors are shrugging off risk and uncertainty as they bet on a partial US-China trade deal. (AP: Seth Wenig)

Australian shares are trading slightly higher on rising optimism that the United States and China may sign a partial trade deal in mid-November.

By 12:15pm (AEDT), the ASX 200 had risen 0.3 per cent to 6,673 points.

The Australian dollar, meanwhile, is buying 68.78 US cents.

Wall Street ended its day with solid gains, driven by technology stocks and corporate earnings which exceeded relatively low market expectations.

The Dow Jones index rose 0.2 per cent to 26,828, while the benchmark S&P 500 and Nasdaq indices lifted by 0.7 and 0.9 per cent respectively.

Being 'too optimistic'

It did not take much to lift market sentiment in the past few days.

On the weekend, China's Vice-Premier Liu He said both sides were making "substantial progress".

US President Donald Trump, meanwhile, said on Monday (local time) that efforts t end the protracted trade dispute were going well.

That was despite both nations continuing to feud over trade and politics across the world as their economically damaging trade war dragged on.

"The deal with China's coming along very well. They want to make a deal," Mr Trump told reporters before a Cabinet meeting, stressing the toll that US tariffs had taken on the Chinese economy.

"They sort of have to make a deal ... because their supply chain is going down the tubes."

The US could also withdraw tariffs, scheduled for December, on many consumer goods imported from China — including mobile phones, laptop and tablet computers — if negotiations continued to go well, White House economic adviser Larry Kudlow told Fox Business News.

Tit-for-tat tariffs imposed by the United States and China over the past 15 months have roiled financial markets and resulted in a sharp drag on global economic growth.

Last week, the International Monetary Fund forecast that fallout from the US trade wars with China and other nations will result in global economic growth slipping to 3 per cent — its slowest pace since the global financial crisis a decade ago.

"Any kind of positive development on trade just gets people a little excited, although it is too optimistic to believe that they will reach a whole trade deal as early as mid-November," Robert Pavlik, chief investment strategist at SlateStone Wealth, said.

The 2020 US presidential election was also influencing the talks, investors said, with Mr Trump looking to avoid the possibility of tariffs imposed by China hurting his support base.

ABC/Reuters

Topics: business-economics-and-finance, stockmarket, markets, currency, australia, united-states

First posted October 22, 2019 07:50:55