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Equities

Nikkei Asia300 Index falls, dragged down by Chinese banks

Index heavyweight Samsung Electronics also declines

MUMBAI (NewsRise) -- Asian equities outside of Japan fell Wednesday, as losses in heavyweight stocks overshadowed an overnight rally in U.S. indexes.

The Nikkei Asia300 Index declined 0.7% to 1,416.66, adding to Tuesday's tumble of more than 3%. Chinese banking shares continued to struggle with China Construction Bank (CCB) falling 2.6% and Agricultural Bank of China (ABC), Bank of China (BOC), and Industrial & Commercial Bank of China (ICBC) declining by 1.6% each. Another index heavyweight Samsung Electronics dropped 3.4%.

The A300 had rallied more than 1.5% earlier in the session following positive U.S. cues. The S&P 500 Index rose the most in more than a year on Tuesday, rebounding from the rout it suffered at the beginning of the week. The pause in the selloff prompted a 20% drop in the closely-followed VIX Index. The volatility measure, in addition to concerns over U.S. inflation, was at the center of Monday's slump on Wall Street. The sharp jump in what is commonly referred to as the "fear gauge" had led to souring of funds that allow investors to wager on the volatility index. With markets remarkably calm in recent years, investors had bet on volatility remaining low, and Monday's spike led to significant losses.

Chris Weston, the chief market strategist at Melbourne-based broker IG, said traders are watching implied volatility very closely as it is an essential consideration in managing risk management and is a signal to assess the liquidity from systematic funds.

Hong Kong-listed Tencent Holdings advanced 1.1%. The Chinese social media and mobile gaming company, along with crude oil producer CNOOC and eight others were included in the Hang Seng China Enterprises Index, while China Railway Construction (CRCC) was excluded with effect from Mar. 5. The constituents on the HSCE index would increase to 50 from the current 40. Shares of CRCC declined 2.9%, while CNOOC closed 0.2% lower.

China Merchants Port fell 1.6%. The company said late Tuesday that it will acquire 50% interest in Port of Newcastle for A$607.5 million ($480 million).

India's Tata Motors rose 0.8% after the carmaker said sales at its Jaguar Land Rover unit rose 3% in January from a year earlier. Hero MotoCorp advanced 0.6% after India's biggest two-wheeler maker reported a 4.3% increase in October-December net profit. Cipla rose 0.7% after the drug maker reported a 6.9% increase in quarterly net profit.

Malaysia's Hartalega Holdings added 6.1% after reporting a 70% jump in net profit for the December quarter. Bank Mandiri, Indonesia' largest bank by assets, rose 1.3% after reporting a 49% increase in net profit for 2017. Singapore Exchange advanced 1.7% after saying that total securities turnover jumped by 53% in January on a month-on-month basis.

In country indexes compiled by Nikkei, South Korea dropped 2.8% and China lost 0.9%. Hong Kong closed 0.4% lower, while Taiwan advanced 0.8%. India's gauge lost 0.3%.

The Nikkei Asia300 ASEAN Index of Southeast Asian companies ended little changed.

--Nimesh Vora

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