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Nikkei Markets

Asian stocks fall as trade war uncertainty weighs

Axiata Group tumbles after ending Asia operations merger talks

HONG KONG (Nikkei Markets) -- Asian stocks edged lower on Tuesday, as uncertainty over the outcome of upcoming Sino-American trade talks kept investors cautious.

The Nikkei Asia300 Index slipped 0.2% to 1,265.77

Investors await the outcome of a planned meeting between Chinese Vice Premier Liu He and U.S. trade officials in Washington next month. While the planned talks are set to mark the first face-to-face meeting between high-level American and Chinese officials since July, uncertainties over the outcome of the meeting remain. The negotiations come after the U.S. and China on Sept. 1 imposed a fresh round of punitive trade tariffs on goods imported from each other.

"Even though trade talks are set to resume in October, the U.S. has said there won't be anything special," said Ronald Wan, chief executive at Partners Capital International. "Meanwhile, the market is looking at China to see if the government will announce any favorable policies targeting certain industries."

China's central bank on Friday announced a reduction to the amount of cash banks must hold as reserves by 50 basis points for all lenders.

In Hong Kong, protests have continued despite the withdrawal of a controversial bill that sparked months of unrest. Activists' other demands, including for an independent commission to investigate the police, remain unmet.

Global markets are also watching for the European Central Bank's meeting on Thursday and the U.S. Federal Reserve's policy review next week.

Axiata Group plunged 15.8% in Kuala Lumpur after the company and Norway's Telenor ASA scrapped a plan to merge their Asian operations, potentially escalating competition in a crowded Asian telecommunications market.

Meanwhile, Bloomberg reported, citing people with knowledge of the matter, that Hong Kong-listed CK Hutchison Holdings was weighing combining its Indonesian telecommunications business with that of Axiata Group. CK Hutchison ended 0.6% higher.

Great Wall Motor advanced 1.9% in Hong Kong after the automaker late on Monday reported a 9.5% increase in sales volume for August. Guangzhou Automobile Group rose 1.5% despite reporting a 6.8% decline in August sales.

China Unicom (Hong Kong) added 5% and China Telecom advanced 4.7% after the two telecommunications companies agreed to share the expensive financial burden of rolling out fifth-generation telecom networks in Asia's largest economy. Their larger rival China Mobile climbed 0.3%.

In Taiwan, contract electronics manufacturer Pegatron slipped 1.1% after reporting a 0.2% increase in August sales from a year ago.

Display panel maker Innolux lost 0.6% following a 13.7% drop in sales for last month.

Quanta Computer edged 0.2% higher. The notebook manufacturer on Monday reported a 7.5% decline in August sales.

China Steel added 0.7% despite reporting an 8.2% year-over-year decrease in last month's sales.

Markets in India were closed for a local holiday on Tuesday.

--Benny Kung

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