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Nikkei Markets

US-China trade worries trigger weekly losses for Asian stocks

India's HCL Tech tumbles on Friday after announcing plans to buy certain IBM assets

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan fell this week as concerns over trade relations between the U.S. and China weighed on investor sentiment.

The Nikkei Asia300 fell 1.2% for the week despite posting a 0.3% gain on Friday to close 1,215.31.

Nikkei's gauge for the region had jumped on Monday after Washington said it will hold off on raising trade tariffs on $200 billion of Chinese goods for 90 days, effectively pausing an ongoing Sino-American trade war. However, upbeat sentiment triggered by the move mellowed the next day after President Donald Trump said if a deal with China does not take place, he is a "Tariff Man." Mood worsened after the arrest of Chinese telecommunications-equipment maker Huawei Technologies' chief financial officer in Canada.

"It seems we have entered a period in which investors are overreacting to both the upside and the downside," Kristina Hooper, chief global market strategist at Invesco, wrote in a note. "We have to assume the trade truce will be relatively short-lived and the situation is likely to deteriorate. I believe the U.S. will ultimately capitulate to China - but only after enough cracks appear in the economy."

Regional assets received a boost on Friday after Federal Reserve Chairman Jerome Powell said on Thursday the U.S. economy was performing very well overall, stressing on the strength of the labor market. The remarks helped bolster hopes of a slower pace of U.S. rate increases next year. While the U.S. central bank is widely expected to deliver its fourth rate increase of the year later this month, the outlook for rates next year has been a topic of debate.

Samsung Electronics added 1.1% in Seoul on Friday. The company, a supplier to Huawei, saw its shares decline 2.3% on Thursday. Social media and gaming heavyweight Tencent Holdings advanced 2.1% after falling more than 5% on Thursday, while Taiwan Semiconductor Manufacturing edged 0.5% higher.

Electronics components maker Innolux rose 1% in Taipei despite reporting a 12.9% decline in November sales. Smartphone maker HTC edged 0.6% higher even as sales slumped 74% last month.

Sapura Energy slipped 1.4% in Kuala Lumpur. The stock had risen as much as 4.2% earlier after reporting a 17.4% increase in third-quarter revenue and a narrower loss.

Glovemaker Top Glove ended unchanged after rising as much as 2.5% intraday as index developer FTSE Russell said the company will be added to Malaysia's benchmark KLCI index, effective Dec. 24.

Malaysia's benchmark KLCI ended 0.2% lower on Friday. Moody's Investors Service affirmed the nation's A3 rating, with a stable outlook, saying "robust growth potential" and "deep domestic capital markets continue to support" the rating even as Malaysia's fiscal strength has weakened.

China Southern Airlines climbed 0.9% in Hong Kong on Friday after saying its controlling shareholder, China Southern Air Holding, intends to carry out an equity diversification reform.

China Overseas Land & Investment added 1% following a 17% increase in contracted sales for November.

Indian software services company HCL Technologies slid 5% in Mumbai after saying it agreed to buy select software products from International Business Machines for $1.8 billion.

--Amy Lam and Suzannah Benjamin

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