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Nikkei Markets

Asian stocks fall amid weak China data, focus on trade talks

Chinese lenders contribute the most to the day's losses

HONG KONG (Nikkei Markets) -- Asian shares fell Monday as investors focused on economic data out of China and the U.S., and trade talks between the two countries.

The Nikkei Asia300 Index declined 0.1% to 1,289.76. Hong Kong-listed Chinese lenders were the biggest contributors to the day's losses. China Construction Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China declined by up to 0.7% each. An index of Chinese companies listed in Hong Kong, the Hang Seng China Enterprises Index, ended 0.3% lower.

The S&P 500 Index had ended little changed on Friday, Treasury yields risen, and the dollar climbed against the Japanese yen after robust jobs and manufacturing data from the U.S. Data released on Friday showed that the world's biggest economy created 304,000 jobs in January, the highest in about a year and almost double of what economists polled by Reuters expected. Average earnings rose by 3.2% on-year and the unemployment rate ticked higher to 4%.

Michael McCarthy, the chief market strategist at CMC Markets and Stockbroking, said that it "was surprising Friday session" on Wall Street with investors "unmoved by the jobs boom." He pointed to Caixin services data over the weekend, which showed a further slowing in expansion in China, for the tepid regional risk appetite on Monday.

Data released on Sunday showed that the Caixin/Markit services purchasing managers' index (PMI) fell to 53.6 in January from 53.9 in the prior month. Earlier last week, Caixin had released the manufacturing PMI, which signaled that factory activity in Asia's largest economy continued to contract last month.

There was more positive economic news on Friday out of the U.S. Data by the Institute for Supply Management revealed that manufacturing activity in the country rebounded last Month. The U.S. ISM manufacturing index climbed to 56.6 in January, up from 54.3 the month before and higher than the 54.2 reading expected by analysts surveyed by Reuters.

Meanwhile, focus of Asian investors remained on U.S. and China after high-level trade talks between officials from both the nations concluded last week with promise of more talks. On Sunday, the South China Morning Post reported that President Donald Trump and Chinese leader President Xi Jinping are considering a meeting in Vietnam on Feb. 27 and 28.

In other movers on Monday, Bajaj Auto advanced 1.7% after the Indian two-wheeler reported a 15% on-year increase in sales in January.

Mainland property developers were in focus after January sales data. Hong Kong shares of China Vanke slipped 0.2% following a 28% decline in January contracted sales. China Evergrande Group added 0.2% despite a 32.9% decrease in last month's contracted sales.

Vedanta declined 0.5%. The Indian miner clarified on the transaction of its subsidiary, Cairn India, buying economic interest from a promoter holding company. Vedanta said on Monday that the investment, made at an arm's length basis, was valued independently and was approved by the board of directors of the subsidiary. Shares of the company had plunged by about 18% on Friday after analysts raised concerns of related party transactions regarding the deal.

Dr. Reddy's Laboratories fell 1.6%. On Friday, the Indian drugmaker reported December quarter net profit that was ahead of estimates polled by Bloomberg.

Hong Kong-listed internet services major Tencent Holdings slipped 0.1%. Maoyan International, an online movie ticketing service provider backed by Tencent, declined 1.1% to HK$14.64 in its trading debut after raising HK$1.96 billion ($249.7 million) from an initial public offering.

--Nimesh Vora

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