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Nikkei Markets

Asian stocks fall amid lingering uncertainty over US-China trade dispute

Japan's weak exports also weigh on investor appetite

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan fell Wednesday after worries over economic growth and conflicting reports on U.S.-China trade dispute prompted a selloff on Wall Street.

The Nikkei Asia300 Index declined 0.1% to 1250.10.

The losses on the index came in the wake of a 1.5% slide in the S&P 500 Index on Tuesday following an extended weekend. The biggest decline on the U.S. equity gauge in three weeks came amid a Financial Times report that the Donald Trump administration had rejected an offer from China for preparatory trade talks, citing lack of progress on key issues. The offer for the preparatory talks from Beijing came ahead of a scheduled meeting between Chinese Vice Premier Liu He and U.S. officials on Jan. 30 and 31. The FT report said matters relating to technology transfers and structural reforms by China were the two major sore points that could potentially derail efforts by the two countries to resolve trade tensions.

The FT report was later denied by White House economic adviser Larry Kudlow when speaking to CNBC, Reuters reported.

U.S. equities were not helped by the downward revisions of global growth forecast by the International Monetary Fund on Monday. The report blamed the U.S. and China trade war, a slowdown in Europe and China for the revision, and the possibility of the U.K. leaving the European Union without a deal for the revision.

Asian equities were further pressured on Wednesday by weak data out of the region's second-largest economy. Japanese exports declined 3.8% last month, worse than expected by economists, and reportedly the biggest fall in two years.

On Wednesday, Malaysian and Philippine companies were the biggest drag on the A300 Index, while Chinese and South Korean stocks recovered from early losses. Technology shares were mostly lower for the day, while Chinese telecom companies advanced.

Heavyweights Samsung Electronics, Tencent Holdings, and Taiwan Semiconductor Manufacturing declined by up to 1.1%. Tencent's losses were an extension of the previous day's decline after its online games were found missing from a third list of titles that received approval from mainland authorities this week.

TSMC's fall came amid losses on suppliers to China's Huawei Technologies. The U.S. Justice Department said it will pursue the extradition of Meng Wanzhou, the chief financial officer of Huawei, who was arrested in Canada in December.

China Unicom (Hong Kong) added 4.3%, Hong Kong shares of China Telecom advanced 5.3%, and that of China Mobile rose 1.2% after China's Ministry of Industry and Information Technology said there is a solid foundation to quicken the pace for 5G technology commercialization.

Hong Kong shares of China Shenhua Energy advanced 1.9% following a 6.3% increase in December coal sales volume to 43.8 million tons.

Lenders paced losses in Malaysian equities. CIMB Group Holdings and Public Bank declined by up to 1.9%.

--Nimesh Vora

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