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Equities

Nikkei Asia300 Index flat as China factory data helps erase early losses

Country gauges for China, Hong Kong recover from Wednesday's declines

MUMBAI (NewsRise) -- Asian stocks outside of Japan ended little changed as better-than-expected Chinese factory data erased early losses stemming from U.S. interest rate increase fears.

The Nikkei Asia300 Index ended almost flat at 1,448.15 points.

The gauge, which tracks more than 300 influential regional companies, had fallen almost 1% intraday after the S&P 500 Index declined by more than 1% for a second day on Wednesday. The losses came after Federal Reserve Chairman Jerome Powell's optimistic remarks on the economy and inflation. His upbeat comments had investors considering the possibility of four rate hikes this year as against the three expected at the beginning of the year. It was the second time in February that concern over faster-than-expected rate increases sparked an uptick in market volatility. Global equity markets had slumped early last month after U.S. wage growth data raised inflation fears.

Investors await Powell's comments as he testifies before the U.S. Senate later on Thursday.

"Hawkish comments from Powell have rekindled rate hike fears and this continues to pressure stock markets," said Lukman Otunuga, research analyst at broker FXTM. "With Powell's remarks fueling speculation of the Fed raising rates four times this year, equity markets remain vulnerable to losses."

Meanwhile, China's Caixin/Markit Manufacturing Purchasing Manager's Index rose to 51.6 in February, higher than the 51.3 print expected by analysts. The data, which focuses more on small and mid-sized companies, came as a relief after the official manufacturing PMI for China, released Wednesday, showed factory activity growth slowing to its lowest in one-and-a-half years.

Investors also took in India's December quarter economic growth numbers. Asia's third-largest economy grew 7.2% from a year earlier in the October-December period, ahead of a 6.9% reading that economists polled by Reuters had forecast. For the prior quarter, gross domestic product was revised higher to 6.5%.

Among major movers, social-media major Tencent Holdings and Ping An Insurance Group, both expected to post results later this month, increased 3.4% and 1.5% in Hong Kong. Galaxy Entertainment Group lost 0.4% as Macau casino operators struggled after gross gaming revenues in the former Portuguese colony rose by a smaller-than-expected 5.7% in February.

Maruti Suzuki India ended little changed at 8,876.10 rupees after rising as much as 0.7% earlier following a 15% increase in February car sales. Bajaj Auto, which rose 1.9% intraday after reporting a 30% increase in last month's sales, ended flat at 3,019 rupees.

Malaysian auto company DRB-Hicom slumped 3.1% after swinging to a net loss in fiscal third quarter.

In country indexes complied by Nikkei, China advanced 1.2%, while Hong Kong added 0.6%. Taiwan's gauge fell 0.4%, and India's index lost 0.9%. Markets in South Korea and Thailand were shut for local holidays.

The Nikkei Asia300 ASEAN Index of Southeast Asian companies edged 0.1% lower.

- Nimesh Vora

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