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Nikkei Markets

Asian equities advance after Fed minutes help Wall Street extend gains

Hong Kong insurers lead gains on Nikkei A300 index

MUMBAI (NewsRise) -- Asian shares outside of Japan rose Thursday, tracking overnight gains on Wall Street after minutes of the Federal Reserve's latest meeting reinforced bets the U.S. central bankwould be "patient" on interest rates.

The Nikkei Asia300 Index closed 0.3% higher at 1,232.76. Insurers listed in Hong Kong were the biggest contributors to the advance. AIA Group added 1.4%, Ping An Insurance Group climbed 1.5%, and China Life Insurance rose 1.2%. China Petroleum & Chemical (Sinopec) advanced 1.3% to lead energy stocks higher after Brent crude oil jumped more than 4% on Wednesday to its highest in almost a month.

U.S. equities clocked their fourth straight advance on Wednesday after minutes of the Fed's December meeting suggested that the authority was unlikely to raise rates in the coming months. The minutes revealed that many policymakers were of the opinion that in light of tame inflation readings and the recent financial market volatility, the "timing of future policy firming (was) less clear than earlier." Officials repeated last week's message of Fed Chair Jerome Powell that the U.S. central bank could afford to be patient on tightening its policy amid muted inflation.

In the last quarter of 2018, concerns over slowing growth momentum unsettled financial markets, prompting U.S. equities to tumble and the Treasury yields to flatten. Last week, Powell had signaled more flexibility in setting interest rates this year. The Fed's December minutes reinforced that message.

"The minutes provided confirmation from recent Fed speakers that policy will exhibit "patience" until the effects of recent financial market turbulence on the economy become clearer," Morgan Stanley said in a note. "This is consistent with our view that recession risks will remain low as long as inflation remains well-behaved because monetary policy will react to mitigate downside risks to the economy in that environment."

The dollar index suffered its biggest single day decline on Wednesday amid the dovish minutes. The S&P 500 Index climbed to the highest in four weeks.

Investor focus remained on the latest U.S. and China trade talks, which concluded on Wednesday. China's Commerce Ministry, in a statement on Thursday, said the latest round of trade talks with the U.S. were extensive and established a foundation for a resolution, CNBC reported.

On Thursday, China reported that consumer prices rose by 1.9% on-year last month and prices at the factory were up 0.9%. The retail price inflation was lower than the 2.1% expected by analysts polled by Reuters, while the increase in producer prices missed the 1.6% estimate.

Hong Kong shares of CITIC Securities, a unit of Chinese conglomerate CITIC, closed 2% higher after China's biggest securities company said it plans to buy Guangzhou Securities for 13.5 billion yuan ($2 billion).

Singapore's United Overseas Bank closed 1% higher. The lender on Thursday said it had signed an agreement to renew its strategic regional bancassurance arrangement with the Prudential Group for 15 years.

Samsung Heavy Industries edged higher by 0.1%. The company said earlier Thursday that it is targeting orders worth $7.8 billion in the current year.

Maruti Suzuki India declined 1.1%. The carmaker said it will increase prices of select models effective immediately amid rising commodity prices.

--Nimesh Vora

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