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Nikkei Markets

Asian equities advance as Chinese stocks pace gains

Investor focus remains on US-China trade talks

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rose Monday as mainland Chinese markets gained after a week-long holiday and as investors awaited the outcome of the latest round of trade talks between the U.S. and China.

The Nikkei Asia300 Index of companies outside Japan advanced 0.4% to 1,290.07.

Investor attention this week will be on the new round of talks between the U.S. and China. The discussions are being held in the wake of comments by a top White House economic adviser last week that there was "a pretty sizeable distance to go." President Donald Trump had earlier remarked that he had no plans to meet Chinese President Xi Jinping before a March 1 deadline on trade tariffs.

"There's a sense of urgency to this round because the U.S. has imposed a March 1 deadline by which time they expect the Chinese to put a deal on the table," said Jeffrey Halley, a senior market analyst at OANDA. "If no deal is agreed by then, a belligerent President Trump and U.S. Congress will be more than willing to simply extend the trade war."

The White House, announcing a timeframe for the talks, said lower-level officials will kick off the meetings on Monday and higher principal-level talks will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, Reuters reported.

Meanwhile, focus was on mainland equities and currencies as China's financial markets reopened after last week's Lunar New Year holidays. The Shanghai Composite closed 1.4% higher, while the onshore yuan tumbled 0.7% to 6.789 to a dollar. The yuan's fall was in response to the last week's advance on the dollar index.

Among movers on Monday, heavyweight Taiwan Semiconductor Manufacturing added 3.2%, while Samsung Electronics climbed 0.5%.

Hong Kong shares of Chinese airline companies came under pressure amid a decline in the yuan. Air China and China Eastern Airlines fell 3.3% and 2.7%, respectively. Airlines in China have to pay for fuel and aircraft acquisition costs in dollars.

Tata Steel advanced 2.3%. The Indian steelmaker late Friday reported a 76% jump in consolidated net profit for the December quarter.

SM Prime Holdings climbed 1.7% after the Philippine property developer reported a 17% increase in net income for 2018.

Dr. Reddy's Laboratories fell 5.6% after the Indian drugmaker said its plant in India's southern city of Hyderabad had received 11 observations from the U.S. drug regulator.

Taiwan-listed China Airlines slid 3.3%. The company said Friday that it had cancelled 18 flights due to a pilot strike.

--Nimesh Vora

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