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Nikkei Markets

Asian equities decline as US-China trade worries resurface

Energy companies fall amid slump in Brent crude

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan fell Wednesday as President Donald Trump's latest remarks stoked fresh concerns about U.S.-China trade relations.

The Nikkei Asia300 Index of companies fell 0.5% to 1,323.39.

The losses on the gauge came after Trump reportedly said there was a long way to go before a trade deal was reached with China and that he could impose tariffs on $325 billion of additional Chinese goods if he wanted. His comments brought back the focus on trade worries, which were allayed last month after Trump and Chinese President Xi Jinping agreed to a temporary truce at the G-20 gathering. Following that meeting, the U.S. had agreed to hold off on imposing tariffs on more Chinese goods and to recommence talks.

In addition to Trump's comments, risk appetite was further marred by upbeat U.S. economic data, which could potentially dampen expectations about the Federal Reserve's future interest rate cuts. U.S. retail sales grew 0.4% month-on-month growth in June, better than the 0.1% increase expected by economists. Core retail sales, too, beat estimates, growing by 0.7%.

The better-than-expected U.S. data followed robust activity data from China earlier this week.

"The recent set of data across the U.S. and China contradicts the concerns over growth slowdown," Jingyi Pan, a market strategist at IG Asia, said. The signals on growth could possibly see traders making adjustments to their Fed outlook going forward, she added.

Among movers on the A300 on Wednesday, China's Chow Tai Fook Jewellery Group declined 2.6% after its June quarter same-store sales rose 24% in mainland China, but fell 11% in Hong Kong and Macao. Goldman Sachs said the decline was worse than expected, adding that the "weakness indicates a more serious sales deterioration in June versus April to May."

Chinese offshore energy explorer CNOOC slid 1.8%, leading energy-related shares lower after the Brent crude yesterday declined by the most in two weeks.

Ping An Insurance Group climbed 0.5%. The Chinese insurer reported that January-June gross premium income from life insurance and health insurance business increased 9.2% on the year.

Huaneng Power International lost 1.9%. The Chinese electricity company said second-quarter consolidated total power generation in China was down 11.9% on-year and total electricity sales fell 11.5%.

Samsung Electronics dropped 1.7%. The chipmaker is testing hydrogen fluoride etching gas from companies outside Japan as Tokyo's tightening of export controls risks cutting off the vital chipmaking material to South Korean manufacturers, the Nikkei Asian Review reported.

--Nimesh Vora

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