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Nikkei Markets

Asia stocks advance on hopes China may take more steps to boost growth

Chinese lenders emerge as biggest contributor to A300 advance

HONG KONG (Nikkei Markets) -- Asian shares edged higher on Monday, led by Chinese companies after weak economic data prompted hopes of more growth-supportive measures from Beijing.

The Nikkei Asia300 Index advanced 0.1% to 1,258.41. Chinese lenders were the biggest contributors to the index's advance, along with energy companies. Bank of China (BOC), China Construction Bank (CCB), and Industrial and Commercial Bank of China (ICBC) gained by at least 0.9%. Hong Kong shares of CNOOC, China Petroleum & Chemical (Sinopec), and PetroChina each rose by up to 1.5% after Brent crude climbed to near $63 a barrel.

Data showed on Monday that China's economic growth during October-December slowed to 6.4% from 6.5% in the prior quarter. The final quarter's 6.4% expansion took the growth for the whole of last year to 6.6%, reportedly the slowest since 1990. The slowdown in China's economic momentum comes amid a trade war with the U.S., which has resulted in both the nations imposing tariffs on each other's imports.

The data, coming on the heels of disappointing December trade and manufacturing data, further strengthened investor expectations of more economic stimulus from Beijing. In recent weeks, Chinese policymakers have pledged to increase support for the economy to mitigate the risks of a further slowdown. Earlier this month, the country's central bank cut the reserves lenders are required to hold.

Louis Kuijs, head of Asia economics at Oxford Economics, pointed out that in response to the worsening economic data and following a mandate from the December Central Economic Work Conference, the policy stance has moved more toward supporting growth.

On Friday, in a signal of increasing policy support, China's National Development and Reform Commission, the Ministry of Commerce, and State Administration for Market Regulation had held a joint press conference in Beijing, focusing on boosting consumption, including encouraging spending on automobiles and home appliances.

Among movers on Monday, Hong Kong-listed Chinese technology major Tencent Holdings added 0.9%. Reuters reported, citing two sources with knowledge of the matter, that Tencent is considering a bid for the holding company that controls South Korean gaming company Nexon.

Wipro slipped 2.5% following its December quarter earnings. While the Indian software company's December quarter net profit exceeded expectations, its revenue growth on-quarter in constant currency terms and guidance for the current quarter disappointed investors.

Bangkok Bank advanced 2.8% after the Thai lender's full-year 2018 net profit rose by 7%, helped by higher net interest income.

Indian engineering conglomerate Larsen & Toubro slipped 0.3% after the nation's securities regulator rejected the company's share buyback plan, citing its debt-equity ratio post the buyback.

Mobile operator China Unicom (Hong Kong) climbed 0.2%. The company added a net of 2.03 million mobile billing subscribers in December, bringing the aggregate number to 315.04 million. In December 2017, China Unicom had added 2.82 million mobile billing subscribers.

Sun Pharmaceutical Industries advanced 1.9%, recovering from Friday's 8.5% tumble that triggered by a report that a second whistleblower had filed a fresh complaint against the Indian drug maker. The company on Friday said that it had not received the complaint and requested the Indian securities regulator to examine the matter in its entirety.

--Nimesh Vora

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