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Nikkei Markets

China state support expectations boost Asian stocks

Unicom gains on profit alert while Singapore Technologies rises after order win

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan rose Monday, as expectations of state support for Chinese companies and mainland markets cheered investors.

The Nikkei Asia300 Index rose 1.1% to 1,214.19. China's benchmark Shanghai Composite Index posted its steepest single-day gain since March 2016, jumping 4.1% to add to its 2.6% gain on Friday, after mainland regulators signalled support for the stock market and voiced confidence in the nation's economic fundamentals. Authorities will likely have a series of measures to boost confidence in the markets, Ma Jun, a member on the People's Bank of China's monetary policy committee, told Shanghai Securities News and Radio Television Hong Kong. Separately, China's Vice Premier Liu He said at a State Council meeting on Saturday that measures to support the market need to be implemented quickly.

"Expectations are rising that policy makers will consider adding renewed stimulus into the Chinese economy before the end of 2018, which is seen as a positive influence for the stock market," Jamal Ahmad, global head of currency strategy and market research at currency trading firm FXTM, wrote in a note.

The Shanghai Composite has shed 19.7% so far in 2018, weighed by escalating Sino-American trade tensions and rising U.S. borrowing costs.

China's State Administration of Taxation on Saturday announced some new personal tax incentives to boost spending in Asia's largest economy amid the trade war with the U.S. PBOC's Ma Jun reportedly said he expects tax cuts or fee reductions next year to reach or exceed 1% of China's gross domestic product -- a size that may be greater than the tax cuts in the U.S.

Chinese financial shares posted strong gains in Hong Kong, with China Construction Bank (CCB) rising 2.4% and Ping An Insurance Group gaining 3.3%.

Mobile phone services provider China Unicom (Hong Kong) advanced 2.6% after saying its net profit for the nine months ended Sept. 30 likely more than doubled from a year earlier to about 8.78 billion yuan ($1.27 billion).

Cathay Pacific Airways rose 1.5% despite reporting a 1% decline in passengers carried in September for Cathay Pacific and Cathay Dragon. Cargo and mail carried by the two airlines last month increased 1.7% from a year earlier.

Market operator Singapore Exchange advanced 2.2%. The company late on Friday reported a 0.4% increase in first-quarter net profit from a year earlier and a 2.2% rise in revenue.

Astro Malaysia Holdings fell 3.6% to 1.35 ringgit in Kuala Lumpur. Nomura maintained its "neutral" rating on the stock, but cut its target price to 1.44 ringgit from 2.81 ringgit. Lackluster subscriber growth and average revenue per user trends remain a long-term concern, the brokerage said.

Singapore Technologies Engineering added 1.2% after saying its electronics arm secured a contract worth 435 million Singapore dollars ($315.8 million) in the third quarter.

--Suzannah Benjamin

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