Chinese stocks hit 10-year highs amid optimism over Trump-Xi negotiations.

SHANGHAI/HONG KONG (Reuters) - Chinese stocks closed at their highest level in more than 10 years on Monday, boosted by expectations of a trade deal between the United States and China after officials from both sides drafted an agreement ahead of a meeting between leaders this week.

At the close, the Shanghai index rose 1,18%, while the CSI300 index, which includes the largest companies listed in Shanghai and Shenzhen, advanced 1,19%. The Hang Seng index in Hong Kong climbed 1,05%.

Top economic officials from China and the U.S. discussed on Sunday the terms of a trade deal that will be reviewed by U.S. President Donald Trump and Chinese President Xi Jinping later this week. The agreement would suspend the increase in U.S. tariffs and Chinese controls on rare earth exports, U.S. officials said on Sunday.

"Investors have been sitting back watching the trade negotiations for some time, and the weekend's events were a rather positive surprise. This will give markets a boost," said Kenny Ng, strategist at Everbright Securities International.

Ng said the market still needs to determine whether the final terms of the agreement reflect what was outlined over the weekend or if they contain unexpected elements.

Trump and Xi will meet on Thursday on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju, South Korea, to sign the agreement.

In Tokyo, the Nikkei index rose 2,46% to 50.152 points.

In Hong Kong, the Hang Seng index rose 1,05% to 26.433 points.

In Shanghai, the SSEC index gained 1,18%, to 3.996 points.

The CSI300 index, which tracks the largest companies listed in Shanghai and Shenzhen, rose 1,19% to 4.716 points.

In Seoul, the KOSPI index rose 2,57% to 4.042 points.

In Taiwan, the TAIEX index rose 1,68% to 27.993 points.

In SINGAPORE, the STRAITS TIMES index rose 0,41% to 4.440 points.

In Sydney, the S&P/ASX 200 index rose 0,41% to 9.055 points.

(Reporting by the Shanghai and Hong Kong newsroom)