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Nikkei Markets

Asian stocks fall amid rising concerns over US-China trade

CNOOC, Wipro among key movers on A300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan declined Thursday amid increasing wariness over whether the U.S. and China can mend their trade relationship.

The Nikkei Asia300 Index of companies fell 0.4% to 1,318.69.

Losses on the Asian gauge came amid a report by The Wall Street Journal that progress in reaching a trade deal had stalled while the U.S. determines how to address Beijing's demands for easing restriction on Huawei Technologies. No face-to-face meetings had taken place and none were scheduled after President Donald Trump and his Chinese counterpart Xi Jinping agreed to resume talks at a G20 gathering last month, the report added.

The report comes on the back of comments by Trump this week that there was a long way to go before a trade deal was reached with China and that he could impose tariffs on $325 billion of additional Chinese goods if he wanted.

Stephen Innes, a managing partner at Thailand-based Vanguard Markets, said it looked like investors had "returned to an elevated state of caution" in light of indications that there has been no notable progress in bridging the trade differences.

U.S. equities fell by the most in three weeks yesterday and the 10-year U.S. yield declined six basis points. U.S. equity index futures pointed to more losses on Wall Street on Thursday.

Meanwhile, South Korea's central bank earlier Thursday cut the key policy rates by quarter percentage points. The central bank said it reckons that the pace of global economic growth continues to slow amid the U.S.-China trade dispute.

Indonesia's central bank, too, reduced borrowing costs earlier in the day, cutting the seven-day reverse repo rate to 5.75%.

Among movers on the A300 Index, offshore oil producer CNOOC declined 2.3% to HK$12.88. Daiwa Capital Markets downgraded the shares to "hold" from "outperform" and cut the price target to HK$13.80, citing oil price weakness. Brent crude prices are down more than 4% so far this week, headed for the worst performance in one-and-half months.

Taiwan Semiconductor Manufacturing climbed 0.8%. After Taiwanese markets closed, the company reported a 7.6% decline in second-quarter net profit.

Cathay Pacific Airways closed 0.7% lower after the airline said combined June passenger traffic of the full-service international airline and its regional unit Cathay Dragon grew 6% year-on-year.

Wipro advanced 3.6% after the Indian software exporter reported a 12.5% year-on-year increase in June quarter net profit.

--Nimesh Vora

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