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Asia300

Asian stocks fall as worries over US-China trade resurface

Overnight slump on Wall Street also hurts investor enthusiasm

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan fell Friday amid worries that the U.S. and China may not be able to strike a new trade deal before the end of this month.

The Nikkei Asia300 Index of companies outside Japan fell 0.6% to 1,284.78. The losses on the index came after the worst day on Wall Street in two weeks on renewed worries on the trade front.

The S&P 500 Index declined by about a percent overnight amid comments by White House economic adviser Larry Kudlow that the U.S. and China have "got a pretty sizeable distance to go" before a trade deal is reached. Kudlow's comments damped recent optimism that the two nations were making progress toward a new trade deal before March 1, when the 90-day trade truce announced in December ends.

Adding more uncertainty over the prospects of the trade deal were reported comments by President Donald Trump that that he did not plan to meet Chinese leader Xi Jinping before the March 1 deadline. Trump, on Twitter last week, had said that "no final deal" would be made before a meeting between him and the Chinese President.

Margaret Yang, a market analyst at CMC Markets, said Trump's scrapping of the plan to meet the Chinese leader had re-ignited "fears that the two countries are probably facing difficulties to reach an agreement on key issues surrounding technology and intellectual properties."

The dollar index climbed to fresh two-week highs on Thursday amid the renewed trade tensions. The 10-year U.S. yield fell to near 2.65%. The offshore Chinese yuan slipped to about 6.79 to the dollar.

In movers on Friday, Tata Motors plunged 17.3% after the Indian owner of Jaguar Land Rover reported a third-quarter loss of about 270 billion rupees ($3.8 billion), its worst ever. The company said that the British luxury unit's performance in the quarter was affected by challenging market conditions in China.

Samsung Electronics was among the biggest contributors to the losses on the A300 index, falling 3%, while its peer SK Hynix dropped 4.2%. The losses came on the back of a weak session for U.S. technology shares on Thursday.

Chinese companies listed in Hong Kong were the other major contributors. CNOOC led energy names lower, falling 2.4%, after Brent crude declined 1.5% for the week.

South Korea's Netmarble added 8.7%, while Hong Kong-listed Chinese technology major Tencent Holdings, resuming trade after three days, closed 0.6% lower. Reuters reported, citing The Korea Economic Daily newspaper, that Netmarble is partnering Tencent to bid for a company that controls South Korea's Nexon.

Malaysia's Axiata Group slipped 4.4% amid a report that Nepal's top court had asked the telecom firm to pay more than $530 million in taxes related to capital profits following its purchase of Nepalese mobile operator Ncell.

--Nimesh Vora

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