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Asia300

Asian equities decline as Chinese real estate developers slump

Jiayuan International plunges 81%, Sunshine 100 China loses 65%

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan edged lower on Thursday, dragged down by Chinese real estate developers.

The Nikkei Asia300 Index slipped 0.1% to 1,246.31. Hong Kong shares of China Vanke fell 3.7% and China Evergrande Group slid 3.1%. Mainland developers declined amid an 81% plunge in shares of real estate company Jiayuan International Group and a 64.6% drop in Sunshine 100 China Holdings. Jiayuan has $350 million of debt due to mature on Thursday, Bloomberg reported. E-mail requests sent to the two companies seeking comments were not immediately answered.

Chinese insurers and technology companies rose Thursday. Ping An Insurance Group's shares listed in Hong Kong climbed 0.3% after the company said life insurance accumulated gross premium income jumped 21.4% in 2018. Tencent Holdings edged 0.1% higher. Bloomberg reported that the company will soon release a test version of the Game of Thrones game for smartphones.

After a difficult last quarter of 2018, risk appetite has been buoyed by comments by U.S. Federal Reserve officials and minutes of the December Fed meeting that indicated that the monetary authority was unlikely to raise rates in the coming months. Fed officials were of the opinion that low inflation allowed the central bank to be patient on interest rates.

The S&P 500 Index has advanced by about 4.5% this year and up over 10% from its recent lows.

However, Jingyi Pan, a market strategist at IG Asia, was of the opinion the current gains were merely a recovery from the "overtly bearish sentiment into end-2018."

"To continue from here, we would require the delicate balance of supportive policy, reduced political disruption, and stabilized growth situation," she said.

Samsung Electronics and Taiwan Semiconductor Manufacturing (TSMC) rose by 1.2% or more on Thursday.

After Taiwanese market close, TSMC reported a 0.7% rise in December quarter net profit, in line with expectations. The tech major said it expects revenue of $7.3 billion to $7.4 billion in the current quarter and operating margins of 31% to 33%.

Indonesian lenders were mostly higher after the country's central bank left the seven-day reverse repurchase rate at 6%. On Wednesday, Bank of Indonesia's head had said the "key rate was already near its peak." Bank of America Merrill Lynch said this comment hinted at a prolonged pause and potential rate cuts this year. Bank Mandiri added 1% and Bank Central Asia and Bank Rakyat Indonesia rose by at least 0.8% each.

Gree Electric Appliances, China's second-largest home appliance maker, dropped 1.7% in Shenzhen after saying that net profit in 2018 increased between 16%-21%. That compares with a 45% increase in the previous year.

South Korea's Lotte Chemical rose 2.2%. The company said on Thursday its affiliate has acquired a Turkish engineering company for 125 billion won (US$112 million) to strengthen its position in the construction material market.

--Nimesh Vora

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