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Nikkei Markets

Asian stocks rise on bets more central banks to ease rates

Chow Tai Fook Jewellery, Tencent among key gainers on A300

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rose Thursday amid bets that more central banks will join the U.S. Federal Reserve in providing support to alleviate the economic damage from the novel coronavirus.

The Nikkei Asia300 index of companies outside Japan advanced 1.3% to 1,323.17.

Asian stocks gained after all three major U.S. equity indexes jumped about 4% overnight. The Bank of Canada yesterday joined the Fed in cutting interest rates amid risks posed by the virus. Former Vice President Joe Biden emerging a front runner in the Democratic presidential nominations further boosted risk appetite.

Following the rate cut by the Fed and the BoC, investors are betting that the European Central Bank will lower its deposit rate next week and the Bank of England would cut the key policy rate later this month. Prior to the Fed easing, the Reserve Bank of Australia had cut its policy rate.

Jeffrey Halley, a senior market analyst at OANDA, said the Canadian central bank's rate cut reinforced "the thesis that the world's major central banks are embarking on a coordinated rate-cutting cycle" to offset the effects of the epidemic.

Meanwhile, the virus continued to spread in Italy and in U.S. Italy ordered the closure of all schools and universities until March to contain the worst outbreak of the virus outside of Asia. The European nation has reported more than 100 deaths from the virus. The death toll in the U.S. climbed to 11 after California reported its first fatality. The most populous U.S. state declared emergency.

In movers on the A300 on Thursday, State Bank of India climbed 1.1%. The Indian government had approved a plan for SBI to lead a consortium that will buy a stake in troubled private lender Yes Bank, Bloomberg reported, citing people with knowledge of the matter. Shares of Yes Bank surged 25.8%.

Chow Tai Fook Jewellery Group jumped 6.3% despite the Chinese jewelry chain operator reporting a 60% drop in retail sales value for January and February in Hong Kong and Macao. It said overall sales in the period decreased 42% in China.

Jefferies said it expects the company to see a recovery in China during the April-June quarter. The brokerage maintained its "buy" rating on the shares.

Heavyweight Tencent Holdings led technology shares higher, advancing 3.1%.

--Nimesh Vora

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