Hong Kong, China (AFP) — Asian markets were mixed Monday on broad optimism that China and the United States are close to a mini trade deal, while Hong Kong rallied after last week’s hefty losses but investors remain on edge over violent protests that have wracked the city.

US traders sent the Dow above 28,000 for the first time on Friday after top White House officials played up the progress of negotiations with Beijing.

Donald Trump’s economic adviser Larry Kudlow said the first part of a wider pact was on track, while Commerce Secretary Wilbur Ross said that there’ll be a deal “in all likelihood”.

Then on Saturday, China said Vice Premier Liu He had spoken to US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, and had “constructive discussion on each side’s core concerns regarding the phase-one agreement.”

It added that the two sides will “continue to maintain close communication.”

The comments provided a much-needed fillip after differences over whether, when and by how much to reduce tariffs on each other’s goods spilled out into the open.

Trump this month denied the Chinese commerce ministry’s claim that the two sides had agreed to roll back existing tariffs as part of the deal, details of which have not been released.

Shanghai rose 0.6 percent and Tokyo ended 0.5 percent higher, while Taipei added 0.6 percent and Bangkok put on 0.1 percent.

“Renewed optimism about US-China trade negotiations seems to have been the main initial driver of improved risk sentiment,” said Patrik Schowitz at JP Morgan Asset Management.

“In the current round of talks, more than in previous rounds, we see momentum toward reaching at least a limited trade deal, and certainly a mini-deal would remove some of the negative sentiment overhang for the real economy and markets.”

AxiTrader’s Stephen Innes said investors were beginning to see a bottoming-out of the global slowdown.

“Much of this view is dependent on a phase-one deal with China getting signed, auto tariffs put aside, and (as) hard Brexit risks subside,” he said.

“Yet should an agreement not be reached and tariffs are raised further, it’s conceivable the global economy will continue to slide, very possibly into a recession in the quarters ahead.”

Hong Kong climbed more than one percent, having lost almost five percent last week, with traders keeping tabs on events after another weekend of street clashes but with the city’s transport network avoiding the disruption that characterised last week.

But the situation remains on a knife-edge with demonstrators holed up in a university campus, trying to repel police with petrol bombs and bricks, and officers warning they may use live rounds if confronted by deadly weapons.

The threat, which came after one officer was struck with an arrow, marked a further escalation of the near six-month crisis that has rocked the city and hammered its economy.

Observers pointed out that the situation could have an impact on the China-US trade talks, with lawmakers in Washington expected to pass a bill sought by protesters in Hong Kong that aims to defend civil rights in the city.

There are concerns the unrest could lead to the cancellation of elections planned for Sunday.

“Authorities will face a delicate balancing act on whether to postpone the polls, risking escalating protests, and claims of political interference; or hold them as scheduled,” said Jeffrey Halley, senior market analyst at OANDA.

“The Hong Kong administration’s track record on critical political decisions won’t fill the markets with confidence.”

Among other markets, Singapore fell 0.4 percent, Seoul shed 0.1 percent, Manila lost 0.5 percent and Wellington slipped 0.2 percent.