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Nikkei Markets

Asian stocks gain on trade deal optimism, hopes of China support

Chinese equities boost A300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan advanced Wednesday amid optimism over a U.S.-China trade deal and expectations of more supportive measures from Beijing.

The Nikkei Asia300 Index of companies outside Japan rose 0.9% to 1,276.79.

Chinese companies were among the biggest contributors to the gauge's advance. An index of Chinese companies listed in Hong Kong, the Hang Seng China Enterprises Index, jumped 1.6%. CITIC Securities, a unit of conglomerate CITIC, and Haitong Securities led mainland brokers higher, climbing at least 2.7% each after China's foreign exchange regulator yesterday announced the cancellation of quota limits under the Qualified Foreign Institutional Investor (QFII) and RMB Qualified Foreign Institutional Investor (RQFII) schemes, lifting restrictions on portfolio inflows under those schemes.

"The removal of quotas for QFII and RQFII affirms the Chinese regulator's commitment to liberalize access to China's financial markets for both bond and equity investors," Goldman Sachs said in a note.

Asian equities were buoyed by a report by the South China Morning Post late yesterday that China had offered to buy more American agricultural products in return for a better trade deal. The report comes ahead of a high-level meeting between officials of the two countries next month. Last month, Beijing had halted purchases of U.S. agricultural products after President Donald Trump imposed tariffs on more Chinese goods.

The news flows on U.S.-China trade has been more positive in recent days. Both the countries are scheduled to resume talks in Washington next month and U.S. Treasury Secretary Steven Mnuchin said there had been progress on a deal and the nations had a "conceptual" agreement on enforcement concerns.

Asian equities on Wednesday reviewed a further boost in the form of comments by the editor of a leading Chinese newspaper. Hu Xijin, the editor of the Global Times newspaper, said on Twitter that China will introduce important measures to ease the negative impact of the trade war. The measures will benefit some companies from both China and the US, he added. The Global Times is a Chinese tabloid published by the People's Daily of China's ruling Communist Party.

In other movers on the A300, Hong Kong conglomerate CK Hutchison Holdings added 2.1% and Malaysian telecom operator Axiata Group advanced 2.2%. Bloomberg reported yesterday, citing people with knowledge of the matter, that CK Hutchison was weighing combining its Indonesian telecommunications business with that of Kuala Lumpur-listed Axiata Group.

Suppliers to Apple were mostly higher. Largan Precision added 3.3% and Pegatron climbed 1.3%. The iPhone maker on Tuesday unveiled its new phone called the iPhone 11, which it said will have three variants.

Index heavyweight Taiwan Semiconductor Manufacturing closed 0.6% higher. The world's biggest contract chipmaker reported late yesterday that sales last month were up 17% from a year earlier.

Other Taiwanese companies advanced despite a year-on-year decline in sales in August. Innolux added 1.8% despite a 14% decline in sales and Quanta Computer rose 0.5% though its sales declined 7.5%.

--Nimesh Vora

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