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Most key European markets were firmly in the black by the close, but London underperformed, while Wall Street showed solid gains by late morning trading in New York.
Earlier, Shanghai had spearheaded gains across Asia with a surge of more than five percent, while Hong Kong and Tokyo each rose 0.5 per cent in value.
Optimism over the negotiations had already provided support to global equities in January and February, but the president's comments gave extra impetus to investors to ramp up buying.
"Global markets are on the rise ... as markets celebrate the news of an indefinite delay to the deadline beyond which US will ramp up tariffs on Chinese imports," said IG analyst Joshua Mahony.
"Donald Trump's decision to push back the Mar 1 deadline comes amid significant progress on a number of crucial fronts, including intellectual property protection, technology transfer, agriculture, services and currency.
"The fact that the US are seeking to address the value of the Chinese currency is of particular interest to markets."
The news fired currency markets, with the yuan extending gains to a seven-month high, while other high-yielding, riskier units were also up against the dollar.
Trump said on Twitter that the US "has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency and many other issues".
He added: "As a result of these very productive talks, I will be delaying the US increase in tariffs now scheduled for March 1."
Trump also said he planned to hold a summit with his Chinese counterpart Xi Jinping at his Mar-a-Lago estate in Florida to sign a deal.
China's Xinhua news agency added that the two sides had "made substantial progress on specific issues" including on transfer of technology, intellectual property and agriculture.
TRUMP, THE MARKET MOVER
Trump also made a splash in the oil market on Monday, causing petroleum prices to fall by nearly two dollars per barrel when he urged OPEC to help cut "high" prices and aid the "fragile" world economy.
"Oil prices getting too high. OPEC, please relax and take it easy," Trump tweeted.
Britain and the United States meanwhile agreed Monday to hold on to their system of handling multi-trillion dollar financial transactions to avoid market uncertainty following Brexit.
The UK and US carry out trades of derivatives - or securities whose value is based on an asset such as currencies, stocks and commodities - worth a combined US$2.4 trillion daily, Bank of England governor Mark Carney told a press conference in London.
Key figures around 1640 GMT:
London - FTSE 100: UP 0.1 per cent at 7,183.74 points (close)
Frankfurt - DAX 30: UP 0.6 per cent at 11,505.39 (close)
Paris - CAC 40: UP 0.3 per cent at 5,231.85 (close)
EURO STOXX 50: UP 0.5 per cent at 3,280.01
New York - Dow: UP 0.7 per cent at 26,200.87
Shanghai - Composite: UP 5.6 per cent at 2,961.28 (close)
Tokyo - Nikkei 225: UP 0.5 per cent at 21,528.23 (close)
Hong Kong - Hang Seng: UP 0.5 per cent at 28,959.30 (close)
Euro/dollar: UP at US$1.1350 from US$1.1335 at 2200 GMT
Pound/dollar: UP at US$1.3068 from US$1.3053
Euro/pound: UP at 86.84 pence from 86.81 pence
Dollar/yen: UP at 110.91 yen from 110.69 yen
Oil - Brent Crude: DOWN US$1.99 at US$65.13 per barrel
Oil - West Texas Intermediate: DOWN US$1.72 at US$55.54 per barrel