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Nikkei Asia300 index extends gains on bets US rate hike likely delayed

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan extended last week's rally on Monday, amid bets interest rates in the U.S. will likely remain low for a longer-than anticipated period. Better-than-expected economic data from China also boosted regional markets.

The Nikkei Asia300 index rose 0.2% to 1,276.84, adding to last week's over 3% gains. China Merchants Port Holdings jumped 5.1% in Hong Kong after saying it expects first-half net profit to rise at least 50%. The H-shares of China Life Insurance added 3.2% after reporting an 18% increase in accumulated premium income for the first six months of the year. Ping An Insurance Group advanced 2.3%. The Nikkei index for China edged 0.1% higher. India's Wipro rose 3.1% after the software exporter said it will consider a buyback proposal at its board meeting on July 20.

Korea Aerospace Industries plunged 11.5% after the state audit agency said Sunday the country's transport utility helicopters developed by the company had various defects and ordered the filing of damages claim against Korea Aerospace. The South Korea index, however, closed higher by 0.6%. Samsung SDS added 4.1% and Samsung SDI rose 3.3%.

Data showed on Monday that China grew at a faster-than-expected pace in the second quarter and the county's retail sales and industrial production data for June also beat forecasts. China's economy grew at 6.9% in the April to June quarter, same as in the previous quarter. Separately, retail sales in Asia's largest economy rose 11% last month, while industrial output increased 7.6%.

"Growth does appear to have remained fairly stable last quarter. What's more, the economy appears to have ended Q2 on a strong note," Capital Economics said in a note. The research house, however, does not expect the strength to sustain. "The recent crackdown on financial risks has driven a slowdown in credit growth, which will weigh on the economy during the second half of this year."

Also helping risk appetite on Monday was lower inflation and weak retail sales data out of the U.S., making investors reconsider how many U.S. interest rate hikes lay ahead in the face of slowing inflation and growth. The data carried S&P500 and Down Jones Industrial Average to life-time highs on Friday.

The index for Hong Kong fell 0.1%. Galaxy Entertainment Group lost 3.2% after a leading junket operator warned of liquidity channel impairment and advised clients to withdraw money from affected bank accounts, according to Daiwa Capital Markets. Henderson Land Development rose 3.3% to 46.10 after JP Morgan reportedly raised the stock to "Overweight" with a target price of HK$ 52.60.

The Nikkei's India index rose 0.2%, helped by gains in information technology stocks after Wipro's announcement on its share buyback plans. HCL Technologies rose 2.2% and Infosys added 1.6%. Consumer goods maker Hindustan Unilever advanced 1.3% ahead of its earnings on Tuesday.

The Taiwan country index edged lower by 0.1%.

The Singapore index of Nikkei rose 0.8%, primarily on the back of a 1.6% advance in index heavyweight DBS Group Holdings. Singapore Press Holdings slipped 2.6% after net profit for the third quarter fell 45%. The company said that the operating environment is expected to remain challenging in view of the continuing disruptions in the media industry.

In other South East Asian county indexes, the Philippines index rose 0.6% and Thailand added 0.1%. Indonesia gained 0.3%, while Malaysia fell 0.1%. Vietnam lost 1.5%.

--Nimesh Vora and V. Phani Kumar

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