Asia-Pacific

Asia stocks climb ahead of G20 summit

Asian shares have started the week's trade cautiously, while oil futures are soaring high on the back of US-Iran tensions.

Asian shares have started off on a cautious note as investors pinned their hopes on signs of a thaw in Sino-US trade negotiations, while oil prices firmed on worries over heightened US-Iran tensions.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.16 per cent in Monday's early trade, while Japan's Nikkei ticked down 0.26 per cent.

Wall Street shares closed slightly lower on Friday after hitting a record high thanks to signals last week from the Federal Reserve that it would soon cut interest rates to bolster its economy from trade conflicts.

China's President Xi Jinping will attend the G20 summit in Japan this week, a gathering where he is also expected to meet US President Donald Trump.

Doubts nevertheless remain on whether the two sides could come to any meaningful agreement as the tensions have extended beyond tariffs, including the US inclusion of Huawei, the world's biggest telecoms gear maker, on a blacklist that effectively bans US firms from doing business with the company.

The US Commerce Department said on Friday it was adding several Chinese companies and a government-owned institute involved in super computing with military applications to its national security "entity list" that bars them from buying US parts and components without government approval.

In China, the state-backed Global Times newspaper said FedEx Corp is likely to be added to Beijing's "unreliable entities list".

Oil prices held firm near three-week highs hit last week after the US and Iran came to the brink of war following Iran's shooting down of an unmanned US surveillance drone.

Brent crude futures rose 0.6 per cent to $US65.58 ($A94.59) per barrel, while US crude futures were up 0.75 per cent at $US57.88 ($A83.49) per barrel.

Tehran said the drone was spying over its territory while Washington said it was downed over international airspace.

President Trump said on Sunday he was not seeking war with Tehran after a senior Iranian military commander warned any conflict in the Gulf region could spread uncontrollably and threaten the lives of US troops.

Yet tensions remain high between the longtime foes, with Washington due to announce "significant" sanctions on Iran on Monday.

The combination of heightened geopolitical worries and likely US interest rates cuts encouraged investors to seek the safety of gold.

The precious metal stood at $US1,406.2 ($A2,028.3) per ounce, near Friday's six-year high of $US1,411.2 ($A2,035.5).

The euro rose to three-month high of $US1.1379 in early Monday trade while the dollar fetched 107.33 yen.

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