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Nikkei Markets

Asian stocks gain as investors bet China epidemic risks to recede

Hong Kong stocks boost A300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rose Wednesday as investors continued to mark down risks related to the coronavirus outbreak in China.

The Nikkei Asia300 index of companies outside Japan advanced 0.8% to 1,381.02.

Earlier in the day, China reported 97 new deaths from the virus, taking the total toll to above 1,100. While the death toll continued to increase, the number of new infections, at just above 2,000, fell to the lowest in two weeks. The fall in the number of new cases come a day after China's top medical adviser predicted that the outbreak would peak in the latter half of February before receding.

Hong Kong led Asian stocks higher on Wednesday. Equities appear to have "little qualms" looking past the updates on the virus amid hopes that incoming monetary or fiscal support can mitigate any ensuing negative economic fallout, Lukman Otunuga, a senior research analyst at FXTM, said.

In recent days, central banks of Malaysia, Thailand and the Philippines have cut their key policy rates and Singapore's monetary authority has expressed willingness to ease in the face of the virus threat. China's central bank has injected liquidity, cut reverse repo rates, and offered special lending funds to combat the virus.

Federal Reserve Chair Jerome Powell, in his testimony to lawmakers yesterday, said the impact of the virus on the Chinese economy and the world needs to be monitored, but it was too early to assess the nature of threat the virus posed to the U.S. economy.

In major winners on the A300 on Wednesday, Hong Kong-listed shares of China Construction Bank and Industrial and Commercial Bank of China rose at least 0.5% each, while heavyweight Tencent Holdings added 0.5%.

Hon Hai Precision Industry climbed 1%. The Taiwanese iPhone assembler hopes to resume 50% of its production in China by the end of February, Reuters reported, citing a source. The company had shut plants in China following the virus outbreak.

Hartalega Holdings advanced 2% after the Malaysian glove maker reported a 1.3% on-year rise in net profit for the third quarter and a 10% increase in revenue.

AirAsia declined 2.44%. The carrier has hired BDO Governance Advisory as an "independent expert" to assist a committee set up in response to allegations contained in the Airbus case settlement. The company's listed long-haul affiliate AirAsia X, too, separately announced the appointment of BDO for the review.

Meanwhile, Malaysia's benchmark equity index dropped 0.6%. The third-largest Southeast Asian economy grew 3.6% in the fourth quarter last year, slower than the previous quarter's 4.4% and below the 4.3% expansion expected by economists polled by Nikkei Markets.

--Nimesh Vora

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