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Nikkei Markets

Asian stocks surge as fears of US-Iran military clash fade

Samsung Electronics hits record high on strong operating profit forecast

HONG KONG (Nikkei Markets) -- Asian shares outside Japan jumped Thursday as the risk of a military conflict between the U.S. and Iran diminished following President Donald Trump's conciliatory remarks.

The Nikkei Asia300 index advanced 1.8% to 1,405.01.

Asian equities, like their U.S. peers, received a boost from Trump's comments, which indicated that he does not intend to pursue military action in response to Iran's attack on American troops in Iraq. The U.S. president said that no American lives were lost in Iran's attack on U.S. military bases in Iraq, and that "Iran appears to be standing down." He added that the U.S. was willing to make peace with anyone who wanted it.

Trump's comments alleviated fears of further confrontation in the region. Earlier in the week he had threatened action if any American targets were attacked by Iran to response to the killing of an Iranian commander in a U.S. airstrike.

Margaret Yang Yan, a market analyst at CMC Markets (Singapore), said Trump's remarks have helped geopolitical risks to recede and have ruled out "an immediate escalation in the situation."

Among the major movers on the A300 on Thursday, Samsung Electronics jumped 3.2% to a record high, adding to yesterday's 1.8% advance, after it forecast a better-than-expected operating profit for the December quarter.

Morgan Stanley remained "overweight" on the company's shares. "We see upside risk based on a strong start to the first quarter 2020 memory outlook, and Samsung stock is one of the most attractive in the sector," it said. Samsung's peer SK Hynix advanced 1.6%, adding to yesterday's 3.6% surge.

Taiwan Semiconductor Manufacturing and Tencent Holdings, which, along with Samsung, are the top three weighted technology shares on the A300, added 2.4% and 2.1%, respectively.

China Railway Construction added 1%. A unit of the company won a contract worth $2.48 billion to build and operate dual tram lines in Colombia. And a consortium of its units won the bid to construct railway stations.

LG Electronics dropped 1.3% after the South Korean company said it expects to log 98.6 billion won ($84.2 million) in operating income in the December quarter, falling far short of the median forecast of 254.8 billion won by analysts polled by the financial arm of Yonhap News Agency.

Meanwhile, data released Thursday showed consumer prices in China rose 4.5% in December, compared with expectations for a 4.7% increase. Prices at the factory declined 0.5% after falling 1.4% in November. China's trade data is due next week.

--Nimesh Vora

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