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Nikkei Markets

Asian stocks gain as US, China resume talks to resolve trade dispute

Chinese companies among the biggest contributors to A300's advance

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan advanced Friday, boosted by the best session on Wall Street in two weeks following resumption of trade talks between the U.S. and China.

The Nikkei Asia300 Index rose 1.2% to 1,233.38.

The gauge's advance came after the S&P 500 Index rallied over a percent yesterday amid comments by China's Commerce Ministry and President Donald Trump that indicated talks between the two major economies were ongoing. A spokesman of the ministry said the two nations were communicating about their ongoing trade dispute and talks needed to be in the direction of cancelling tariffs. Meanwhile, in an interview with Fox News, Trump indicated that discussions were held yesterday.

The comments were ahead of planned new tariffs. With effect from this Sunday, the U.S. will levy 15% tariff on new Chinese imports and Beijing will levy additional tariffs of up to 10% on American goods.

Jingyi Pan, a strategist at IG Asia, said while the comments had boosted the risk mood, the sustainability of the short-term relief, nevertheless, remained a question and the upside on equities will be capped until there is "any notable breakthroughs" in the U.S.-China trade relations.

Chinese companies were among the biggest contributors to the advance on the A300 on Friday. PetroChina advanced 3.7% after oil-and-gas major's first-half net profit increased 3.6% on-year, helped by higher crude oil prices.

Industrial and Commercial Bank of China added 1.2% after the lender's first-half net profit rose 4.7% year-on-year.

CNOOC jumped 5.4% after the Chinese offshore energy producer's net profit in the same period increased 18.7% on-year, helped by higher oil and gas sales.

CRRC climbed 1.9% after the rail transit equipment supplier's 1H net profit rises 16.2% on-year, thanks to higher operating income and strength in railway equipment business. China Railway Construction added 2.7% after winning construction projects. A consortium, comprising its subsidiary China Railway Construction Investment Group and other units, won the bid for two public-private partnership construction projects.

Tenaga Nasional added 1.2%. The Malaysian electricity company reported a 9.5% decline in second-quarter net profit.

Malaysian conglomerate Genting climbed 1.7% following a 56% jump in second quarter net profit.

CIMB Group Holdings climbed 2.4%. The Malaysian lender said that second-quarter net profit fell 24%, while net interest income was up 0.4%.

YTL Corp. rose 2.6% after the Malaysian conglomerate reported a net profit for the second quarter compared with a loss a year earlier.

Meanwhile, South Korea's central bank left the key policy rate unchanged at 1.50% earlier Friday, in line with expectations. Yesterday, the country had proposed a 513.5 trillion won ($424 billion) budget for 2020 to boost its economy.

--Nimesh Vora

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