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Nikkei Markets

Asian stocks little changed as investors await US-China trade talks

India, Philippine monetary policy decisions also in focus

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan ended little changed on Thursday amid policy decisions by central banks of India and the Philippines, and focus on upcoming trade talks.

The Nikkei Asia300 Index ended almost unchanged at 1,291.92.

With financial markets in China and Hong Kong still shut and in the absence of any major economic data, trade relationship between the U.S. and China was the point of focus for investors. The two countries are set to resume negotiations next week in Beijing in an attempt to clinch a deal before a March 1 deadline.

Both the nations had in December agreed to temporary trade truce of 90-days which ends on March 1. U.S. President Donald Trump has said that if a deal was not reached by that date, the tariffs on Chinese imports will be raised.

"The wait continues for US-China trade talks amid the lack of fresh impetus," said Jingyi Pan, a market strategist at IG Asia. Trump's State of the Union address may have invoked concerns relating to next week's talks, she added.

Pan was referring to reported remarks by Trump in the State of the Union address that any trade deal with China must include an end to unfair trade practices, reduce the U.S. trade deficit with China, and protect American jobs.

Meanwhile, India's rate-setting Monetary Policy Committee on Thursday unexpectedly cut its key policy interest rate by 25 basis points to 6.25% and changed its stance to 'neutral' from 'calibrated tightening.' Two-thirds of the economists polled by Reuters had expected a status quo on rates.

The cut in the key policy interest rate came amid a revision in inflation for the first half of the next fiscal year to 3.2%-3.4% from 3.8%-4.2% earlier.

In the Philippines, the Bangko Sentral ng Pilipinas maintained the policy rate unchanged at 4.75%, in line with expectations. The central bank said inflation expectations had declined further and it expected inflation to settle between 2% to 4% in the current year and in 2020.

Shares of Indian auto companies rose following the surprise rate cut. Carmaker Maruti Suzuki India advanced 1.3%, two-wheeler manufacturer Hero MotoCorp added 2%, and tractor and SUV maker Mahindra & Mahindra advanced 1%.

Lupin fell 2.4% amid a report by television channel CNBC-TV18 that the U.S. drug regulator had issued observations relating to a unit in India's central state of Madhya Pradesh.

Cipla advanced 1.1% after the Indian drugmaker said it had received approval from the U.S. drug regulator for a generic version of a tablet used in the treatment of pulmonary arterial hypertension.

Sun Pharmaceutical Industries jumped 4.5% following upbeat December quarter earnings of its U.S. unit Taro Pharma.

Hyundai Motor fell 2.7%, while its unit Kia Motors added 0.7%. The South Korean car manufacturers last Friday reported that sales volume of their U.S. subsidiaries were up 3% and 4.9% in January, respectively. Korean financial markets were closed from Monday to Wednesday for the Lunar New Year holidays.

Samsung Electronics slipped 0.3%. Moody's Investor Services said on Friday that the likely moderation in this year's earnings was still supportive of the credit quality of the South Korean conglomerate.

--Nimesh Vora

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