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Nikkei Markets

Asian equities decline amid uncertain economic outlook, trade concerns

Largan slips after lower sales while Tata Motors drops on S&P downgrade

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan fell Wednesday as investor concerns grew over economic growth outlook and U.S.-China trade relations.

The Nikkei Asia300 Index declined 1.5% to 1,242.61. Technology heavyweights Tencent Holdings, Samsung Electronics, and Taiwan Semiconductor Manufacturing Co. (TSMC) declined 2.3%, 1.7%, and 3.4%, respectively.

U.S. President Donald Trump said Tuesday that trade negotiations with China had already started, but reiterated that if a deal is not reached, he is a "Tariff Man." Over the weekend, Washington had agreed to hold off on raising tariffs on $200 billion of Chinese goods following a meeting between Trump and Chinese President Xi Jinping at a G-20 summit.

Separately, declining yields on long-dated U.S. bonds raised concerns over growth in the world's largest economy. The yield on 10-year U.S. Treasury notes fell for a sixth day on Tuesday, even as the Federal Reserve is widely expected to raise rates for a fourth time this year later this month.

"The market decline in the U.S. overnight and the flattening of the yield curve reflect that economic growth momentum is taking over as the primary concern for investors," Tai Hui, the chief market strategist for Asia Pacific at J.P. Morgan Asset Management, wrote in a note. "Market volatility is likely to rise," with investors "questioning growth dynamics and increasing their sensitivity towards downside risks to growth."

Hon Hai Precision Industry fell 2.5% in Taipei. The company, which assembles iPhones for Apple, is considering setting up a factory in Vietnam amid the ongoing trade war between the U.S. and China, Reuters reported, citing Vietnamese state media.

Largan Precision fell 3.7% after reporting a 28.6% slide in November sales.

China Vanke added 1.5% in Hong Kong after saying contracted sales for last month jumped 67.8% from a year earlier.

Ayala, among the Philippines' largest conglomerates, fell 1.1% in Manila. The company said its unit AC Industrials signed a distributorship agreement with South Korea's Kia Motors. Kia Motors edged 0.5% higher in Seoul.

Maruti Suzuki India fell 2.1% after saying it plans to raise prices of various models in January. India's largest carmaker said the cost of its vehicles has been impacted adversely by higher commodity prices and foreign exchange rates.

Tata Motors slid 3.7%. S&P Global Ratings downgraded the automaker's by a notch to 'BB-' from 'BB,' citing weaker-than-expected profitability at its luxury unit Jaguar Land Rover.

India's equity benchmark the BSE Sensex fell 0.7%. The nation's Monetary Policy Committee kept the key interest steady at 6.5% on Wednesday, as was widely expected.

--Amy Lam

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