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Nikkei Markets

Asian equities advance ahead of Federal Reserve rate decision

HTC, energy companies main movers on A300

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rose Wednesday ahead of the U.S. Federal Reserve's decision on interest rates.

The Nikkei Asia300 Index added 0.3% to close at 1,274.17. The index had declined 1.5% in the previous two sessions.

Later Wednesday, the Fed is expected to cut interest rates by a quarter percentage points, according to a Reuters survey of economists carried out during Sep. 9-12. However, the likelihood of the central bank cutting rates has fallen in recent days amid progress on U.S.-China trade talks and worries over the inflation outlook.

The U.S. and China have returned to the negotiating table to sort out their monthslong trade dispute. Meanwhile, data showed that the core U.S. inflation accelerated quicker than expected. Moreover, the volatility in crude oil prices following the weekend attacks on Saudi Arabia's infrastructure increased concerns over the inflation outlook.

Most economists, nevertheless, expect the Fed to ease rates. Economists at Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch, and ING Bank expect the authority to cut rates by 25 basis points.

In major movers on the A300 index on Wednesday, IHH Healthcare added 1.1%. The Malaysian hospital operator said late Tuesday that it plans to acquire Prince Court Medical Centre for one billion Malaysian ringgits ($245 million) in cash from wealth fund Khazanah Nasional. The deal is expected to be completed in the first quarter of 2020.

HTC jumped 5.2%. The Taiwanese consumer electronics company appointed Yves Maitre, a former executive of telecom company Orange, as its new CEO. The current CEO Cher Wang will step down and will remain the chairperson of the company.

Hang Seng Bank climbed 0.3%, while its parent HSBC Holdings added 0.2% in Hong Kong trading. Moody's Investors Service lowered the outlook on their long-term foreign-currency bank deposit ratings to negative from stable.

Energy-related shares declined following a 6.5% fall in Brent crude yesterday after Saudi Arabia indicated that production will return to normal levels by the end of this month. CNOOC declined 1.4%, PetroChina dropped 1.6%, and PTT Exploration and Production tumbled 4.6%.

--Nimesh Vora

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