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Nikkei Markets

Asian stocks fall on concerns US-China trade war may extend to next year

Chinese companies among biggest contributors to losses on A300

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan declined Wednesday on mounting risks that the trade war between the U.S. and China will likely spill over to next year.

The Nikkei Asia300 Index fell 0.6% to 1,293.09.

Asian equities came under pressure after U.S. President Donald Trump indicated he was in no hurry to sign a deal with China and it would be better to wait until after next year's presidential election. Following Trump's comments, U.S. Commerce Secretary Wilbur Ross told CNBC that delaying a trade deal after the elections could take the leverage away from China.

ING Bank said Trump "dashed hopes" of an interim trade deal by mid-December, implying a prolonged a period of uncertainty that will last well into next year.

Meanwhile, another development also added to investor concerns. The U.S. House of Representatives yesterday approved a bill that requires Trump to condemn abuse of Muslims in China's northwestern region of Xinjiang. China's foreign ministry on Wednesday vowed to further respond if the legislation progresses without providing details, Bloomberg reported.

U.S. equities fell for the third straight session yesterday, while safe-haven demand boosted U.S. bonds. The offshore Chinese yuan dropped by the most in three months.

Chinese companies were among the biggest contributors to the losses on the A300 on Wednesday. Industrial and Commercial Bank of China dropped 1.1%, Ping An Insurance Group slipped 1.5%, and Tencent Holdings shed 0.7%.

Alibaba Group Holding fell 1.9% to HK$189, its fourth day of losses. The Chinese e-commerce major, which listed in the city last month after a blockbuster initial public offering, said the joint representatives for its IPO had fully exercised an over-allotment option for 75 million shares, or 15% of the total offer shares. Alibaba raised an additional 13.2 billion Hong Kong dollars ($1.7 billion) via the over-allotment, bringing the total IPO gross proceeds to HK$101.2 billion.

Hyundai Motor added 0.4%. The South Korean carmaker said it will buy back common shares worth 259.6 billion won ($217 million) from Dec. 5 and invest about 61.1 trillion won between 2020 and 2025.

Tata Motors jumped 7.1% after unit Jaguar Land Rover's U.S. November sales by volume gained 6.2% from a year earlier.

-- Nimesh Vora

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