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Nikkei Markets

Asian stocks gain as weak US data adds to bets of Fed rate cut

Hong Kong property developers extend advance

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rose Thursday as investor focus remained on U.S. data and the outlook for Sino-American trade deal.

The Nikkei Asia300 index advanced 0.6% to close at 1,290.87.

Data released yesterday showed that retail sales in the U.S. declined by 0.3% in September from a month ago. That compared with a 0.3% increase expected by economists polled by Reuters. Control retail sales, a closely watched subset of total sales, too, missed estimates.

The weak spending data, which came on the back of muted inflation and disappointing services data earlier this month, make it almost certain that Federal Reserve would cut rates once more at this month's meeting. According to the CME FedWatch, there is now a near 90% chance that the Fed will cut rates by a quarter percentage points at the Oct. 29-30 meeting.

Meanwhile, investors continued to keep an eye on the U.S.-China trade development after both the countries last week agreed to a preliminary agreement. U.S. Treasury Secretary Steven Mnuchin said yesterday that the two sides are working on the text of a trade deal that could be signed by President Donald Trump and Chinese leader Xi Jinping next month, Reuters reported.

In movers on the A300 on Thursday, Hong Kong property developers built on yesterday's advance. Hong Kong Chief Executive Carrie Lam on Wednesday unveiled a set of policies aimed at easing housing supply in the coming years. Lam said Hong Kong will expedite its planning work to resume certain types of private land to be used wholly for public housing and announced relaxation of policies for potential first-time home buyers.

Henderson Land Development, New World Development, and Sun Hung Kai Properties advanced by at least 0.8% each.

China Life Insurance added 0.9% after reporting a 6.1% increase in January-to-September accumulated premium income.

Huaneng Power International declined 2.9% after saying that electricity sold in the third quarter fell 6%.

China Eastern Airlines slid 0.3%. The airline said passengers carried increased 6.4% on-year in September, while the load factor decreased 1.47%.

Index heavyweight Taiwan Semiconductor Manufacturing closed 1% lower. After Taiwanese markets closed, the world's biggest contract chipmaker reported September quarter net profit that exceeded estimates.

--Nimesh Vora

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