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Nikkei Markets

Asian stocks rise, with trade and Hong Kong unrest watched

Sembcorp Industries climbs after terminating project in India

HONG KONG (Nikkei Markets) -- Asian shares ended higher Tuesday amid a rebound for Chinese companies. Worries over the ongoing unrest in Hong Kong and uncertainty surrounding a Sino-American trade deal, however, capped gains.

The Nikkei Asia300 Index of regional companies outside Japan advanced 0.7% to 1,327.05. An index of Chinese companies listed in Hong Kong added 0.7%, a day after suffering its biggest decline in three months. The Hang Seng China Enterprises Index had fallen 2.5% Monday amid widespread violence in Hong Kong and higher-than-expected China inflation data.

Among heavyweights, China Life Insurance climbed 1% and China Construction Bank advanced 0.6%. Tencent Holdings rose 2.2% a day before it reports third-quarter results.

Investors continued to be on the lookout for developments between the U.S. and China amid indications the removal of existing tariffs remained a sore point as both sides attempt to reach a preliminary agreement. Last week, China's Commerce Ministry indicated that tariffs could be rolled back in a phased manner, but President Donald Trump said that he had not decided on anything. Traders are hoping for more clarity on outlook for a deal when Trump speaks at the Economic Club of New York on Tuesday.

Edward Moya, senior market analyst at Oanda, said that in the absence of "concrete details," traders are moving toward a cautious wait and see mode.

"Equities have a lot of good news priced into them at these levels," he added. "It makes then vulnerable to potentially ugly downside corrections should the trade deal script take an unexpected turn for the worse."

Political unrest in Hong Kong also weighed on sentiment Tuesday. Hong Kong equities were among the worst performers in the world on Monday after a protester was shot at by the police. Demonstrations, which intensified over the weekend following the death of a teenaged protester, spilled into Monday and Tuesday. The city's benchmark equity index, which slumped 2.6% on Monday, closed 0.5% higher following a choppy session.

Hong Kong property developers extended yesterday's losses. Swire Pacific lost 0.4% and New World Development slipped 0.2%.

Banpu ended unchanged after the Thai energy company reportedly said that net profit in the September quarter declined by almost 90%.

Sembcorp Industries added 0.9% in Singapore. The company on Tuesday said its joint development company Amaravati Development Partners (ADP) and Andhra Pradesh state government have mutually agreed to terminate a project to develop a new capital city for the Indian state.

The closure of the project will not impact Sembcorp's investment plans in India, where it has a large presence in the power generating business, the Singapore company added.

--Nimesh Vora

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