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Nikkei Markets

Asian stocks decline as investors await US-China trade talk details

Singapore Air, Hon Hai Precision, Hartalega Holdings among movers on A300

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan edged lower on Wednesday as investors await updates on the U.S.-China interim trade deal negotiations.

The Nikkei Asia300 index slipped 0.1% to 1,346.06. Prior to today's pullback, the index had climbed more than 7% in the current quarter.

The focus of investors remains squarely on the prospects of the U.S. and China reaching an interim trade deal. Expectations regarding the signing of a phase-one deal have increased in recent days following constructive comments from both the sides and reports that the U.S. is mulling rolling back a portion of the tariffs on Chinese goods.

However, there remains a possibility that investors may have moved too quickly to price in a deal. The Nikkei Asian Review reported Wednesday that complete removal of levies remains a sticking point for the phase-one deal and Beijing has doubled down on demands that may threaten to delay the preliminary trade agreement.

Meanwhile, traders in Asia contended with positive U.S. services data released yesterday. While the rebound in U.S. service activity allayed fears over an economic slowdown, it made it more likely that the Federal Reserve will keep its monetary policy unchanged for an extended period.

According to CME FedWatch Tool, the U.S. monetary authority is 94% likely to leave rates at the current level of 1.50%-1.75% in December after cutting rates three times this year.

Meanwhile, Thailand's central bank cut its key policy rate by a quarter percentage point to 1.25% earlier in the day. Economists were divided ahead of the outcome. Fifteen of the 28 economists polled by Reuters expected a status quo and remaining had forecast a quarter-percentage reduction.

In movers on the A300 on Wednesday, Hong Kong Exchanges & Clearing closed 0.4% higher following a choppy session. The company posted a 1% on-year drop in net profit during the first nine months amid the prolonged trade tensions between China and the U.S. and the social unrest in Hong Kong.

Singapore Airlines fell 2.7%. While the airline posted a 68% increase in its second-quarter net profit, the company's cargo business remained weak.

Hartalega Holdings slipped 0.9% after the Malaysian glove maker's second-quarter net profit declined 14%.

Hon Hai Precision Industry added 0.4% after the Taiwanese iPhone assembler said sales last month rose 1% from a year ago.

Sun Pharmaceutical Industries slipped 0.6%. The Indian drugmaker said today it had made a licensing deal with AstraZeneca UK to introduce cancer drugs in China. The initial tenure of the agreement is for 10 years.

Aboitiz Power declined 3.1% after the Philippine electricity company's third-quarter net income declined 36% from a year earlier.

--Nimesh Vora

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