Hong Kong's benchmark Hang Seng Index closed 3% higher after both the U.S. and China chose to de-escalate a budding trade war.

The world’s two biggest economies agreed to a temporary rollback of most of their recent levies after negotiating in Switzerland over the weekend.

Both sides are hailing the temporary reprieve, which will cut U.S. duties on Chinese goods to 30 percent, but analysts say underlying issues remain.