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Nikkei Markets

Asian equities surge on optimism over US-China trade deal

Chinese companies pace gains in Asia300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan advanced Monday, boosted by optimism about an interim trade deal between the U.S. and China and an upbeat U.S. jobs report.

The Nikkei Asia300 Index of companies outside Japan rose 1.6% to 1,336.42. Chinese companies were the biggest contributors to the gauge's gains. China Construction Bank added 0.6%, leading mainland lenders higher. Air China jumped 7.2%, China Southern Airlines rallied 8%, and China Eastern Airlines surged 4.7%, aided by the yuan's climb to over two-month highs. On account of their high dollar debt exposure, Chinese airlines are sensitive to moves on the Chinese currency. An index of Chinese companies listed in Hong Kong added 1.8%, its best session in more than three weeks.

Asian equities were buoyed by record highs on Wall Street on Friday and positive comments by U.S. Commerce Secretary Wilbur Ross over the weekend. Ross told Bloomberg that U.S. and China were making progress toward reaching a phase-one trade deal and that license allowing American companies to sell to Chinese telecom equipment maker Huawei Technologies would be coming shortly.

Earlier last week, the U.S. Trade Representative's office, White House economic adviser Larry Kudlow, and China's Ministry of Commerce said talks were making progress. President Donald Trump said that a deal, if reached, would be signed in the U.S.

Data released on Friday showed that U.S. employers added 128,000 jobs last month compared with 89,000 expected by economists polled by Reuters. Further supporting the risk appetite was the average hourly earnings increase of 0.2% month-on-month, less than the 0.3% pace estimated.

In other movers on the A300 gauge on Monday, Infosys climbed 3.1%. The Indian software exporter said no supporting evidence has been found by the company regarding anonymous whistle-blower complaints.

Vodafone Idea jumped 4.7% and Bharti Airtel added 1.3%. The Economic Times reported that a panel considering relief for the troubled Indian telecom sector is looking at a repayment period of as much as 20 years for the adjusted gross revenue (AGR) dues and a reduction in the total taxation.

Hero MotoCorp declined 2.4% after the Indian two-wheeler maker said dispatches in October fell more than 18% year-on-year. Tata Motors slipped 1.6% following a 32% fall in total India sales.

Shanghai Fosun Pharmaceutical Group, a unit of Fosun International, advanced 0.2% after saying it plans to list its Indian unit Gland Pharma in Mumbai.

Hyundai Motor and Kia Motors ended little changed. Hyundai reported that its U.S. unit sold 57,094 vehicles last month, up 8% from a year ago, while Kia record an 11% increase.

--Nimesh Vora

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