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Nikkei Markets

Asian equities fall as Chinese firms pull back after this week's rally

China Life Insurance, Tencent Holdings among losers

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan declined Thursday following a pullback in Chinese companies.

The Nikkei Asia300 index slid 0.4% to 1,380.76. China Life Insurance and Tencent Holdings fell 0.5% each. An index of Chinese companies listed in Hong Kong, the Hang Seng China Enterprises Index, shed 0.4%. The gauge yesterday closed at near its highest in seven months, buoyed by the U.S.-China's interim deal announcement.

The interim deal, reached last week, has helped Asian equities rally in recent days and pushed U.S. stocks to record highs. The deal averted an increase in U.S. tariffs on Chinese imports and reduced duties on more than $100 billion of shipments from the Asian nation. Investors are hoping that the deal would help improve the world economic outlook.

Lukman Otunuga, a senior research analyst at FXTM, said that while the rollback of tariffs has brightened the equities' outlook, it remains to be seen whether the global economy can pick up enough momentum amid the thaw in trade tensions.

Meanwhile, three Asian central banks announced their interest rate decisions on Thursday. Central banks of Japan, Taiwan, and Indonesia left the policy rate unchanged, in line with expectations.

Bank of England later Thursday, too, is expected to leave the key rate unchanged. Seven policymakers are expected to vote for keeping the rates at the present level and two are forecast to vote for a reduction, according to analysts polled by Reuters.

In other movers on the A300, China Railway Construction added 0.6%. The company said last night that its unit China Railway Construction Heavy Industry Corporation plans to list on the Shanghai STAR Market, Reuters reported. Meanwhile, the company was part of the consortium that signed a design and build contract of stage 2 of Etihad Rail Network worth 9.3 billion yuan ($1.3 billion). China Railway's share of the consortium is 51%.

Dongfeng Motor Group, resuming trading after a halt yesterday, declined 2.3%. The Chinese carmaker said yesterday that its unit reduced its stake of 4.5% in PSA Group following the sale of 30.7% shares to Peugeot S.A.

--Nimesh Vora

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