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Nikkei Markets

Nikkei Asia300 rises with US-North Korea summit back on table

Regional energy companies slide after crude prices drop

HONG KONG (Nikkei Markets) -- Asian stocks rose on Monday and U.S. equity futures climbed after President Donald Trump renewed expectations of a meeting with North Korean leader Kim Jong Un.

The Nikkei Asia300 Index added 0.5% to 1,405.18 on Monday. Futures for the S&P 500 Index indicated a stronger opening for Monday after Trump on Sunday said a U.S. team was in North Korea to make arrangements for a summit with Kim. The post on Twitter came days after the U.S. President cancelled a planned meeting with the leader of the isolated state, citing "tremendous anger and open hostility."

Market participants cautioned that the upbeat mood may be transient.

Hussein Sayed, chief market strategist at FXTM, said that while hopes that summit could still take place may support appetite for risk assets, "it has become evident that these developments tend to have only a temporary impact on equities and investors should not be distracted from the fundamental drivers."

Regional energy producers slumped after U.S. crude futures slid 4% on Friday as Saudi Arabia and Russia reportedly discussed easing production cuts. Offshore oil producer CNOOC fell 0.9% in Hong Kong, while Sapura Energy plunged 10.1% in Kuala Lumpur.

PetroChina jumped 6.5% in Hong Kong, defying weaker oil prices, after China's National Development and Reform Commission said it will reform the pricing mechanism for gas for residential users, boosting hopes for higher realized prices.

Global supply chain manager Li & Fung fell 11.1% to HK$2.97 on Monday. Credit Suisse downgraded to stock to underperform from neutral and cut its price target to HK$2.90 from HK$3.86, citing a challenging outlook to achieve its financial targets for the three years through 2019.

IHH Healthcare, Asia's largest hospital operator by market value, tumbled 4.3% in Kuala Lumpur. The company is targeting other assets apart from India's Fortis Healthcare, and is in non-binding talks for potential expansion in premium healthcare services in the northern part of the South Asian country, its chief executive said Monday.

Malaysia's largest lender by assets Malayan Banking fell 2.5% despite reporting a 9.9% increase in first-quarter net profit on the back of higher Islamic banking income. Quarterly net interest income fell 0.5% on year.

Malaysia Airports Holdings climbed 1.9% after saying its net profit in the first quarter surged nearly seven times on year, helped by a one-off valuation gain. Net profit for the quarter ended Mar. 31 was 444.6 million ringgit ($111.7 million) versus 64.3 million ringgit a year ago, according to an exchange filing. The company recorded unrealized gains on the fair value of its investment in GMR Hyderabad International Airport Limited (GHIAL), amounting to 258.4 million ringgit.

Indian power producer NTPC rose 1.4% in Mumbai after the company reported a 46% increase in March quarter profit.

--V. Phani Kumar

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