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Nikkei Markets

Asian equities gain on better-than-expected China manufacturing data

China's August factory activity data eclipse concerns over trade

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rose Monday as better-than-expected China manufacturing data eclipsed concerns over the uncertainty in the Sino-U.S. trade relationship.

The Nikkei Asia300 Index rose 0.2% to 1,258.98.

Manufacturing activity in China this month picked up from August, according to two surveys released on Monday. The September official Purchasing Managers' Index (PMI) came in at 49.8, up from 49.5 in the previous month while the Caixin/Markit PMI posted a reading of to 51.4 compared with 50.4 in August. The reading on both the surveys topped forecasts. Economists polled by Reuters had expected the official PMI at 49.5 and the Caixin PMI at 50.2.

"The September manufacturing PMI picked up slightly more than the market expected, partly due to exports orders. However, its sustainability will depend on how trade tensions evolve," Morgan Stanley said in a note.

To gauge the outlook of the U.S.-China trade relationship, investors will be eyeing the upcoming talks between the two sides. China's Commerce Ministry said yesterday that trade negotiator Liu He will lead the talks that are set to take place in Washington one week after China's National Holidays beginning tomorrow.

The latest developments ahead of the talks were not too positive. According to a report by Bloomberg on Friday, the Donald Trump administration was weighing curbs on American portfolio investments in Chinese firms. Delisting Chinese companies from U.S. bourses are among the options being considered, the report added.

Chinese companies listed in U.S. had tumbled on Friday. Alibaba Group Holding, Baidu, and JD.com fell at least 3.7% each.

Responding to the report, a Treasury spokeswoman said in a statement that the administration was not considering blocking Chinese companies from U.S. exchanges "at this time," Bloomberg reported.

In movers on the A300 on Monday, the H-shares of PetroChina advanced 1.8% after saying it had made "significant" progress in the exploration of unconventional oil and gas.

An index of Chinese companies listed in Hong Kong added 0.5%, led by telecom operators. The index had fallen nine times in the previous 10 sessions. China Unicom Hong Kong climbed 1.6% and China Telecom ended 0.8% higher.

South Korea's SK Innovation added 1.2%. The company said late Friday that it had sold its stake in Peru's oil blocks for about $1.1 billion, Reuters reported.

Hyundai Engineering & Construction rose 1.1%. The company said Friday that it won a construction deal in South Korea worth 459 billion won ($380 million)

Meanwhile, shares of Budweiser Brewing Company APAC advanced in their trading debut in on Monday after the brewer raised HK$39.2 billion ($5 billion) from its second attempt at an initial public offering in Hong Kong. The shares closed at HK$28.20 compared with its IPO price of HK$27.

--Nimesh Vora

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