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Nikkei Asia300 little changed after US-North Korea summit

Anhui Conch Cement closes at record high amid upbeat price outlook

HONG KONG (Nikkei Markets) -- Asian stocks ended little changed on Tuesday, with investors cautious risk appetite seeing little improvement even as U.S. President Donald Trump and North Korean leader Kim Jong Un reached an agreement to denuclearize the Korean peninsula.

The Nikkei Asia300 Index edged 0.1% higher to 1,418.38. At a summit in Singapore, North Korea's Kim committed himself to denuclearization while the U.S. pledged to provide a security guarantee to the country. At a press conference later on Tuesday, Trump said the agreement was "very comprehensive" and that "a lot of goodwill" had gone into it. Still, he said sanctions on North Korea will remain.

While developments about the summit were closely watched by market participants in recent weeks, news of the agreement did little to improve sentiment toward risk assets. U.S. equity index futures were trading lower by late afternoon in Asia, signaling a likely lower opening on Wall Street. Investors were also cautious as they awaited the monetary policy outlook of the U.S. Federal Reserve, which heads into a two-day review later on Tuesday. The central bank is widely expected to deliver its second rate increase for the year this week.

"Peace on the Korean peninsula could deliver significant benefits to both North and South Korea, including potentially a re-rating for South Korean stocks," Philip Wee and Joanne Goh, strategists at DBS Group Research, wrote in a note to clients. "The landmark summit meeting should help to remove a major tail risk for the region's markets and economies. However, it would be prudent to contain excessive optimism, given the enormous gulf between the two Koreas and the costs of reunification."

Anhui Conch Cement rose 2.1% to HK$50.25 in Hong Kong, a record high. Northern Trust Capital Markets reiterated its Buy rating on the stock on optimism over its second-quarter results.

Energy producers CNOOC and China Petroleum & Chemical (Sinopec) rose 1.6% and 1.5%, respectively, while PetroChina edged 0.3% lower. China plans to spin-off oil and gas pipelines from the three companies and form a national gas pipeline network under one company before winter, Bloomberg reported, citing people with knowledge of the matter.

China Railway Construction edged 0.5% lower. The company said its board approved the spin-off and separate listing of its unit China Railway Construction Heavy Industry on the Hong Kong stock exchange's main board.

Vietnamese conglomerate Vingroup edged 0.1% higher. The company has established VinSmart with a registered capital of 3 trillion dong ($131 million) to make smartphones and other electronic devices, Reuters reported.

Nikkei's ASEAN index for Southeast Asian companies lost 0.2%. Data released Tuesday showed Singapore's retail sales rose a slight 0.4% year-on-year in April, damped by categories such as computer and telecommunications equipment, apparel and footwear, department stores and supermarkets, which recorded declines.

-- V. Phani Kumar

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