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Nikkei Markets

Asian stocks post weekly gains amid hopes over trade talks, Fed easing

Hon Hai Precision Industry, Korean Air Lines main movers on Friday

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan posted a weekly gain amid growing optimism over Sino-American trade talks and hopes of monetary easing by the U.S. Federal Reserve.

The Nikkei Asia300 Index ended the week 4.2% higher, despite falling 0.2% to close at 1,318.18 on Friday.

Regional sentiment this week received a boost after U.S. President Donald Trump said he will be meeting China's President Xi Jinping at a G20 summit in Japan next week. The scheduled meeting comes after an apparent lull in Sino-American trade talks since early May.

"Global market angst about trade may increase in the run-up to the Xi-Trump meeting," according to Prakash Sakpal, an economist at ING Asia.

Separately, the Fed on Wednesday held interest rates steady, as widely expected, but indicated that a rate cut might be in the offing. Following the meeting, Fed Chairman Jerome Powell said the case for a "somewhat more accommodative policy" has strengthened. The Fed, which increased rates four times last year, has paused since then amid rising uncertainty around trade relations.

Meanwhile, markets in Hong Kong got a lift as a political unrest eased after the local government suspended a controversial extradition bill following days of large-scale protests.

Hon Hai Precision Industry fell 1.2% on Friday in Taipei. The contract chipmaker's Chairman Terry Gou said at the company's annual general meeting that he is stepping down as he prepares to contest Taiwan's presidential elections next year. The company named its chip-unit head Liu Young-way as new chairman.

Korean Air Lines declined 2.6% in Seoul. Delta Air Lines on Thursday said it acquired a 4.3% stake in Korean Air Lines' parent company Hanjin Kal Corp. The U.S. carrier said it plans to boost its stake in Hanjin Kal to 10% over time. Financial terms were not disclosed.

Cathay Pacific Airways ended 3.5% higher in Hong Kong. The airline on Thursday reported a 4.7% increase in passengers carried last month.

Tata Motors edged 0.1% lower in Mumbai after Moody's Investors Service cut the automaker's credit rating by a notch, citing the persisting weakness at its luxury unit Jaguar Land Rover amid slowing demand in China.

Maruti Suzuki India declined 3.4%. The carmaker Thursday hinted that it may raise prices across variants of its popular Dzire cars, according to Reuters.

Hong Kong power utility CLP Holdings slid 4.3% after saying it expects to report a loss for the six months ending June 30 due to a goodwill impairment of HK$6 billion ($768.6 million) to HK$7 billion ($897 million) related to its Australia business.

--Suzannah Benjamin

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