Asian markets fell Monday after Donald Trump's top economics adviser downplayed the chances of a quick deal to end the China-US trade war, taking the wind out of the sails of last week's rally.
The US leader fuelled a surge in the region's equities Friday by tweeting that he had held positive talks with Chinese President Xi Jinping, before a report said he had even asked officials to draw up a draft bill with an eye on a potential agreement.
But White House adviser Larry Kudlow later tempered expectations, telling CNBC "there's no massive movement to deal with trade".
The news sent US markets into the red, snapping a three-day rally on Wall Street, and sending Asian investors rushing for the door.
"Investors are far too wary of an empty promise," said Stephen Innes, head of Asia-Pacific trade at OANDA.
"But ultimately, they will need to decide how much of President Trump's olive branch to China was a ploy to boost equity markets ahead of the US mid-term elections on Tuesday and how much of it is a bona fide attempt to reach an agreement."
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