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Nikkei Markets

Asian stocks advance as US delays higher tariffs on Chinese goods

Air China, China Life Insurance, Hong Kong Exchange among key movers on A300

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rose Thursday, buoyed by U.S. President Donald Trump's decision to defer a higher tariff on Chinese goods.

The Nikkei Asia300 Index advanced 0.4% to 1,282.15 after Trump said on Twitter the implementation of the planned increase in tariffs from 25% to 30% on Chinese imports was delayed by two weeks to Oct. 15. The president said the delay was a "gesture of goodwill" and done at the request of Chinese Vice-Premier Liu He.

Trump's deferment comes after China earlier announced that it was removing tariffs imposed last year on a few American goods.

The conciliatory gestures came ahead of resumption of negotiations between the two countries. High-level talks are scheduled for early next month in Washington while deputy level exchanges will take place in the coming days. The exact dates for the talks have yet not been announced.

"The nascent thaw in U.S.-China trade relations appears to be gathering momentum ahead of the October trade talks," said Jeffrey Halley, a senior market analyst at OANDA. Expectations of monetary policy easing by major central banks were an added form of support for equities, he added.

Later Thursday, the European Central Bank later is widely expected to easy its monetary policy amid a weak economic outlook and subdued inflation. Goldman Sachs expects the ECB to roll out a three-pronged easing in the form of a 20-basis-points deposit rate cut, dovish forward guidance, and recommencement of quantitative easing.

The U.S. Federal Reserve is almost certain to cut interest rates once again next week and the Bank of Japan could possibly expand the stimulus measures.

In movers on the A300 on Thursday, Air China, up 3.3%, led mainland airlines higher on the back of Chinese yuan's climb to a three-week high amid optimism over trade talks. On account of the high dollar debt exposure, Chinese airlines are sensitive to the moves on the yuan.

China Life Insurance rose 1.6% following a 5.8% increase in premium income for the January-to-August period.

Hong Kong Exchanges & Clearing declined 3.5% after making an unsolicited bid to acquire the London Stock Exchange Group for 29.6 billion pounds ($36.7 billion). Citi Research downgraded the stock to "sell" from "buy" and lowered its target price after the announcement, citing high regulatory hurdles for the deal.

Cathay Pacific Airways slipped 0.9% after the Hong Kong airline reported an 11.3% decline in its total passengers carried during August amid a decline in tourist arrivals into the former British colony.

Energy-related shares underperformed after crude oil prices slid yesterday amid a Bloomberg report that Trump is discussing easing Iran sanctions. PetroChina dropped 1.4% while PTT Exploration and Production declined 2%.

--Nimesh Vora

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