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Nikkei Markets

Asian stocks gain as China vows to bolster IP rights protection

Tencent, AIA and Chinese lenders advance on Nikkei Asia300

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan advanced on Monday after China took measures to strengthen intellectual property rights and U.S. President Donald Trump indicated that a trade deal was near.

The Nikkei Asia300 index climbed 0.85% to 1,322.90.

On Sunday, China issued guidelines for strengthening intellectual property protection, which called for an increase in penalties for infringements and counterfeiting. The guidelines said China will speed up the introduction of a system that penalizes infringements of patents and copyrights while strengthening the protection of trade secrets.

Intellectual property protection has been a key demand of the U.S. to make a comprehensive trade deal and yesterday's measures by China is a signal that it is working toward that.

The reaction of Asian equities indicates that China's step has been "well received" with traders hoping that it will "get impetus back into the interim trade talks," said Jeffrey Halley, a senior market analyst at OANDA.

The recent updates on U.S.-China trade talks have painted a mixed picture of whether the two countries will be able to make a deal before the planned new tariffs come into effect on Dec. 15. President Donald Trump said on Fox News on Friday that an interim deal with China was "potentially very close," but insisted that any deal has to favor Washington.

Further, Trump did not provide a clear indication whether he would sign the Hong Kong pro-democracy rights bill passed last week by the U.S. Congress. A veto of the bill by the U.S. President would be a positive in advancing the trade talks.

An index of Chinese companies listed in Hong Kong, the Hang Seng China Enterprises Index, added 1.17% on Monday. Industrial and Commercial Bank of China led lenders higher, adding 1.4%. Heavyweight Tencent Holdings climbed 1.6%.

Great Wall Motor added 0.6% as the Jiangsu Development and Reform Commission approved the company's joint venture with BMW Holding in China.

China Mengniu Dairy closed 0.85% higher after a choppy session. The company said its unit agreed to buy Australia's Lion-Dairy & Drinks from Kirin Foods Australia for A$600 million ($408 million)

AIA Group rose 3.62%. The Hong Kong-listed pan-Asia insurer said Lee Yuan Siong will replace Ng Keng Hooi as the group chief executive and president from Jun. 1, 2020.

Hong Kong Exchanges & Clearing added 1.5% ahead of Alibaba Group Holding's trading debut in the city on Tuesday.

Tata Motors closed 2.3% higher after falling earlier in the day. The automaker was dropped from India's benchmark BSE Sensex index with effect from Dec. 23. Zinc miner Vedanta advanced 2.74% despite being excluded from the index. Nestle India, which was included in the Sensex, advanced 2.23%.

CIMB Group Holdings declined 0.6% after the Malaysian lender said third-quarter net profit decreased 14.4% from a year earlier.

--Nimesh Vora

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