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Nikkei Markets

Asian stocks edge higher after Wall Street rally

Chinese shares retreat after downbeat profit data; Sinopec erases early gains

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan edged higher on Thursday after a strong overnight rebound on Wall Street, with advances tempered by losses for Chinese companies amid worries over their profit growth.

The Nikkei Asia300 Index of some of the region's most influential companies added 0.2% to 1,192.68. Taiwan Semiconductor Manufacturing Co. (TSMC) jumped 3%, software exporter Infosys climbed 2% in Mumbai, and internet-services company Kakao advanced 3% in Seoul.

The performance reflects caution in the region, despite a strong overnight rally for U.S. stocks that followed a string of weak finishes. The S&P 500 Index jumped 5% on Wednesday after dropping at least 1.5% in each of the four previous days - a spell that sent the benchmark U.S. gauge to the edge of a technical bear. In Asia, the 225-issue Nikkei Stock Average ended up 3.9% at 20,077.62 on Thursday, reclaiming a finish above 20,000.

"While yesterday's price action is definitely a positive sign, it is still too early to conclude whether the market correction is over or more downside is yet to come," Hussein Sayed, chief market strategist at foreign-exchange trading house FXTM, wrote in a report. "To call for a bottom, we need at least a couple of days of strength, not just in price, but also in trading volume, breadth of the market, and fundamentally supported environment. So far, we don't see a shift in fundamentals."

Stocks in Hong Kong and mainland China pared gains in the wake of government data that showed on Thursday that profits at Chinese industrial companies fell for the first time in almost three years amid slowing economic growth and the Sino-American trade war.

Energy producers broadly advanced after U.S. crude oil prices surged 8.7% on Wednesday, rebounding from a string of recent losses. Sapura Energy added 1.7% in Kuala Lumpur and Oil and Natural Gas Corp. increased 1.7% in Mumbai.

Chinese oil shares trimmed or reversed early gains, with CNOOC ending 0.5% higher and PetroChina slipping 0.2% in Hong Kong.

China Petroleum & Chemical (Sinopec) tumbled 4.7% to HK$5.70, after rising as high as HK$6.18 earlier in the day. The refining major has suspended the two top officials at its trading arm Unipec after the company suffered losses, Reuters reported Thursday, citing sources with knowledge of the matter.

Meanwhile, shares of ZTE dropped 3.4% in Hong Kong. U.S. President Donald Trump is considering an executive order in 2019 to declare a national emergency that would bar U.S. companies from using telecommunications equipment made by ZTE and its larger peer Huawei, Reuters separately reported, citing sources familiar with the situation. ZTE said in response to an e-mailed request for comment that it had no comment to offer "for the time being."

 China Southern Airlines fell 1.5% amid broad market losses in Hong Kong. The company said late on Monday that it entered an agreement with Zhuhai China Southern Air Real Property Development to acquire a "customized" property for up to 798.6 million yuan ($116.4 million).

-- V. Phani Kumar

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