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Nikkei Markets

Asian equities surge on optimism over US-China trade talks

Chinese automakers jump as government plans policies to spur demand

MUMBAI (NewsRise) -- Asian shares outside of Japan jumped Wednesday after China and U.S. extended trade talks, prompting hopes that the two nations will resolve their trade disputes.

The Nikkei Asia300 Index closed 2% higher at 1,229.21. Chinese carmakers rose after China's National Development and Reform Commission Chairman said the nation plans to introduce policies to boost domestic spending on automobiles and home appliances. Great Wall Motor soared 9.3%, Geely Automobile rallied 8.4%, Guangzhou Automobile Group jumped 6.9%, and Dongfeng Motor Group added 2.9% in Hong Kong, while SAIC Motor advanced 3.7% in Shanghai. Late Tuesday, Great Wall Motor reported a 6.5% increase in December sales volumes. Shares of Shenzhen-listed Midea Group and Gree Electric Appliances -- China's biggest appliance manufacturers -- climbed 5.8% and 3.2%, respectively.

Regional risk appetite was boosted by a day's extension of the U.S.-China trade talks and positive comments on trade by President Donald Trump. Reuters reported that the trade talks in Beijing were extended for an unscheduled third day amid signs of progress on issues including purchases of U.S. farm and energy commodities and increased access to Chinese markets. The two-day trade negotiations between the two countries were initially scheduled to end on Tuesday.

Trump's comments on Twitter that "talks with China are going well" added to the positive tone.

Jingyi Pan, a market strategist at IG Asia, said Trump's tweet at the conclusion of the second day of the talks and a media report that the president is "eager" to achieve a deal are perhaps "the most bullish signal for the talks yet."

Pan was referring to a Bloomberg report, which cited people familiar with internal White House deliberations, that the U.S. President was increasingly eager to make a deal with China in order to provide a boost to financial markets. U.S. stocks in the last quarter had come under duress on growth slowdown worries amid the trade differences between the world's two largest economies.

Among other major movers, energy-related stocks rose Wednesday after the benchmark U.S. oil contract climbed past $50 a barrel. Hong Kong shares of China Petroleum & Chemical (Sinopec) rose 4.5%, and CNOOC and PetroChina climbed by up to 1.6%. South Korea's SK Innovation and Thailand's PTT Exploration and Production added at least 0.4% each.

Chinese companies listed in Hong Kong were the biggest contributors to the A300's advance. China Life Insurance led insurers higher and Industrial & Commercial Bank of China (ICBC) paced advance among lenders, adding 3.6% and 3.1%, respectively.

Infosys, India's second-largest software exporter, added 0.9% after saying that it will consider a share buyback and a special dividend at a board meeting on Friday. The company is scheduled to report December quarter earnings on the same day.

Shares of Singapore Exchange closed 0.8% higher. The bourse operator said earlier Wednesday that daily average securities turnover declined by 13% in December, while total derivatives volumes rose 17% on-year.

Hong Kong's CK Asset Holdings gained 1.8%. South China Morning Post reported that the conglomerate had submitted an application to redevelop its 1,100-room Harbour Plaza Resort City hotel into a housing estate comprising 5,000 flats.

--Nimesh Vora

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