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Nikkei Markets

Asian stocks rise after Fed pause and dovish signal

Malaysian lenders under pressure amid talk of windfall tax

HONG KONG (Nikkei Markets) -- Asian stocks edged higher on Thursday after the U.S. Federal Reserve's indication that it is unlikely to raise rates this year.

The Nikkei Asia300 Index added 0.1% to 1,332.01. U.S. equity indexes ended mixed overnight after the central bank stood pat on interest rates, as was widely expected, and signaled it will not raise rates in 2019. The Fed raised rates four times last year and had earlier indicated more increases would come. However, analysts did not appear too concerned over the implications for global growth outlook.

DBS Group does not expect the Fed to raise rates in 2019 or 2020.

"Over the past decade or so, the U.S. central bank has repeatedly scaled back its expectation of growth and inflation, and displayed acute sensitivity to the performance of asset markets," Taimur Baig, chief economist at DBS, wrote in a note. Wednesday's decision "reveals a bit more dovish view of the growth and inflation outlook, but they are not that material."

Investors are also watching developments between the U.S. and China on trade. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due to meet Chinese Vice Premier Liu He in Beijing next week for further trade talks.

Shares of chipmaker SK Hynix and technology major Samsung Electronics climbed 7.7% and 4.1%, respectively, in Seoul. New York-listed chipmaker Micron Technology on Wednesday reported better-than-expected quarterly results and said it expects a recovery in the memory chip market.

Henderson Land Development added 2.4% in Hong Kong after reporting a 1.1% increase in 2018 net profit.

China Mobile slumped 4.8%. On Thursday, the world's largest mobile phone company reported a 3.1% rise in 2018 profit even as revenue fell less than 1% from a year ago.

CK Asset Holdings and CK Hutchison Holdings fell 0.4% and 1.1%, respectively, ahead of their respective results announcements.

Lenders in Malaysia fell amid speculation the government was planning to impose a windfall tax on banks. Public Bank shed 2.5% on Thursday, while Malayan Banking lost 0.7% and CIMB Group Holdings declined 1.1%.

Malaysia has no intention to impose windfall tax on banks although the government hopes that banks would be "more flexible" in lending, Federal Finance Minister Lim Guan Eng said in parliament on Thursday.

Markets in India were closed on Thursday for a local holiday.

-- Suzannah Benjamin

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