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Nikkei Markets

Asian equities decline as concerns mount over US bill on Hong Kong

Chinese financial firms, Samsung Electronics, Tencent fall

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan declined Thursday amid increasing likelihood that a pro-democracy Hong Kong bill would be enacted by the U.S., a development that will upset China and potentially derail the trade talks.

The Nikkei Asia300 index of companies outside Japan fell 1.2% to 1,308.79.

Asian equities fell after the bill in support of Hong Kong protestors was passed by both the houses of the U.S. Congress despite warnings by China that the step would prompt it to take countermeasures. President Donald Trump is expected to sign the bill, Bloomberg reported.

The likely enactment of the bill comes at a time when there are indications that the trade talks between the U.S. and China are not progressing well. Yesterday, Trump said China was "not stepping up" on trade talks to the level he wanted. Earlier, Reuters had reported that completion of an interim trade deal was getting delayed and could slide into next year.

Edward Moya, a senior market analyst at OANDA, said the U.S. supporting Hong Kong protestors will hurt "the heavily priced-in U.S.-China phase-one trade deal" and it looked like "the trade optimism bubble seems like it could be ready to burst."

U.S. equity index futures declined Thursday, indicating that Wall Street could extend yesterday's losses. Safe-havens like U.S. bonds and the Japanese yen advanced.

Hong Kong's benchmark equity index and an index of Chinese companies listed on the city's bourse fell 1.6% each. China Unicom (Hong Kong) dropped 1.6% after saying it lost 2.61 million mobile billing subscribers last month.

Mainland financials were the other major losers. China Life Insurance fell 2.4%, China Construction Bank declined 2%, and Industrial and Commercial Bank of China ended 2.1% lower.

Index heavyweights Samsung Electronics and Tencent Holdings fell 1.9% and 1.8%, respectively.

Indian median company Zee Entertainment Enterprises surged 12.4%. Founder Essel Group reportedly said yesterday that it plans to sell a 16.5% stake in the company to financial investors.

Outside of the A300 gauge, trading in H-shares of ArtGo Holdings, a marble processing company, was halted after they slumped 98%. The plunge followed index compiler MSCI's decision to reverse a plan to include the company in its equity benchmarks.

Meanwhile, Singapore reported Thursday that its economy expanded by 0.5% year on year in the third quarter, in line with expectations.

Indonesia's central bank left the key policy rate unchanged at 5% after four successive reductions.

-- Nimesh Vora

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