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Nikkei Markets

Asian stocks rebound as Trump comments fuel optimism over trade deal

Energy shares underperform as Brent crude eases more

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rebounded Thursday after President Donald Trump's comments buoyed hopes around a U.S.-China trade deal.

The Nikkei Asia300 Index advanced 0.3% to 1,261.57 after declining more than a percent yesterday.

Asian equities were boosted by the positive close on Wall Street overnight after Trump said a trade deal with China could be made soon. Trump told reporters at New York yesterday that a U.S.-China deal could come sooner "than you think." Later, after signing a limited trade deal with Japan, Trump said that China was "back in the market" and had begun repurchasing American agricultural goods and that a deal was getting "closer and closer."

Trump's positive tone yesterday was in contrast with his speech at the United Nations on Tuesday when he targeted China's trade practices, alleging that the Asian nation was involved in currency manipulation and the theft of intellectual property. Traders are diligently following any updates on the matter ahead of the proposed high-level trade talks between Chinese and American officials early next month.

Trump's comments lifted the S&P 500 Index by 0.6% yesterday and prompted Treasury yields to rise.

Meanwhile, U.S. political risks remained a major talking point. The White House yesterday released a record of a call between Trump and Ukraine President, which is part of a whistleblower's complaint that had prompted the impeachment enquiry on the U.S. President.

On the A300 on Thursday, energy shares underperformed after Brent crude slipped below $62.50 a barrel yesterday. Brent crude is now almost $10 below the highs recorded last Monday following the attacks on Saudi Arabian oil infrastructure.

CNOOC declined 0.7%, PetroChina lost 2%, and SK Innovation ended 0.9% lower.

Hong Kong-based property developer New World Development rose 2%. On Wednesday, the company said it plans to donate more than a sixth of its farmland to help ease a housing shortage that some believe has contributed to the ongoing protests in the city.

Hong Kong rail operator MTR declined 1.4%. S&P Global Rating said the company's stand-alone credit profile may weaken if protests in Hong Kong continue to adversely impact ridership and retail sentiment in the city.

--Nimesh Vora

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