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Nikkei Markets

Asian stocks fall as China keeps benchmark lending rate unchanged

Most mainland lenders decline, while Samsung climb to record highs

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan fell Monday after China unexpectedly left the benchmark lending rate unchanged.

The Nikkei Asia300 index slid 0.3% to 1,424.40.

On Monday, China maintained the monthly loan prime rate, a reference rate used for pricing floating rate loans, at 4.15%. Capital Economics had forecast that the rate would drop to 4.10% amid the recent decline in bank funding costs from the latest cut in reserve requirement ratio and fall in short-term interbank rates.

Mainland lenders closed mostly lower. China Construction Bank declined 1.8%, Agricultural Bank of China shed 0.9%, and Industrial and Commercial Bank of China lost 1.4%.

Dongfeng Motor Group lost 0.4%. The Chinese carmaker announced 2020 sales target of 3.16 million units, a 7.5% on year growth. Chow Tai Fook Jewellery Group declined 0.7%. The Chinese company acquired Enzo Jewelry to expand its footprint further in mainland China.

Samsung Electronics added 1.8% to climb to fresh record highs, taking its advance this month to nearly 12%. Last week, the South Korean technology major's December quarter operating profit guidance exceeded forecasts. Earlier Monday, the company appointed a new head for its mobile phone business.

SK Hynix, the world's biggest memory chip maker behind Samsung, climbed 0.9%. LG Chem jumped 6.3% while Hyundai Motor slipped 0.4%. LG Chem reportedly said it was considering cooperation with Hyundai Motor but no partnership had been finalized.

China Life Insurance added 0.9% after reportedly saying that it expects a 400%-420% year-on-year jump in net profit for the year ended Dec. 31.

China Resources Beer declined 0.7%. The company said it expects net profit for the year ended Dec. 31 to increase by at least 30% from the year-earlier period amid lower impairment losses, cost savings, and the contribution from Heineken China. Goldman Sachs said the profit alert was below its estimates.

Tata Consultancy Services declined 2.2% after India's largest software exporter's December quarter net profit missed estimates. Smaller rival HCL Technologies declined 1.6% despite reporting a better-than-expected third-quarter profit and raising the lower end of its revenue growth outlook for the fiscal year.

Reliance Industries closed 3.1% lower. The Indian conglomerate late Friday reported a better-than-expected 13.5% rise in December quarter net profit.

--Nimesh Vora

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