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Nikkei Markets

Nikkei Asia300 Index extends losses with US 10-year bond yields above 3%

Samsung Electronics climbs after first-quarter earnings, lifts South Korea's gauge

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan fell for a fifth day straight on Thursday, as U.S. bond yields traded at levels not seen in more than four years, while trade tensions between the world's two largest economies also clouded investor sentiment.

The Nikkei Asia300 Index slid 0.6% to 1,396.63 on Thursday.

Regional investors remained on edge as rising U.S. bond yields threatened to pull cash away from equities and other risky assets. The yield on the 10-year U.S. Treasury note closed over 3% for the first time since January 2014 on Wednesday.

"Bond market pressure is weighing on investor sentiment," said Michael McCarthy, chief market strategist, CMC Markets and Stockbroking. He said a break higher for U.S. 10-year bond yields may spark a "sharp bond market sell off and flavour the debate about the right levels for interest rates as growth continues to improve."

McCarthy said trade talks between China and the U.S. could determine the direction of market moves in the near term. Investors await the outcome of U.S. Treasury Secretary Steven Mnuchin's and Trade Representative Robert Lighthizer's upcoming visit to China to discuss trade issues. The two nations have slapped punitive import tariffs on goods from the other recently.

South Korea's country index defied broad market losses to rise 1.2% as heavyweight Samsung Electronics jumped 3.5% following its first-quarter results announcement. The memory chip, smartphone and television set maker on Thursday reported an operating profit of 15.6 trillion won ($14.4 billion) for the period, up 58% from a year ago, and a 20% increase in revenue.

The country gauges for China and Hong Kong fell 1.5% and 1%, respectively.

Property developer China Vanke declined 4.1% in Hong Kong despite reporting a 28.7% increase in first-quarter net profit to 894.88 million yuan ($141.5 million) and a 68% jump in revenue for the period.

Gree Electric Appliances tumbled 9% in Shenzhen as the air-conditioner maker said it will not pay a dividend for 2017. The announcement came after the company reported a 44.9% jump in 2017 net profit. On Thursday, the Shenzhen Exchange posted on its website a letter requesting that Gree's board explain its reasons for suspending the payout.

China Communications Construction added 1.1% after saying the value of its new contracts rose 20.5% on-year in the first quarter to 179.32 billion yuan.

Ping An Insurance Group fell 3.8%. At the end of the day's trading, the insurer said its net profit grew 11.5% in the first quarter from a year earlier on higher revenue.

Sembcorp Industries slid 2.9% in Singapore after its unit Sembcorp Marine on Wednesday reported an 86% plunge in first-quarter profit. Semcorp Marine tumbled 5.4%.

The Nikkei Asia300 ASEAN index of southeast Asian companies declined 0.7%.

In India, the nation's third-largest software services exporter Wipro fell 2% after reporting a 20% drop in fourth-quarter profit. The nation's gauge dropped 0.3%.

--V. Phani Kumar

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