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=ASIA MARKETS: Nikkei Asia300 Pulls Back Ahead Of US Fed Rate Decision

HONG KONG (Jun 13) -- Asian stocks outside of Japan fell on Wednesday, as sentiment turned cautious ahead of a widely-expected rate increase by the U.S. Federal Reserve.

The Nikkei Asia300 Index shed 0.7% to 1,408.30 on Wednesday. The U.S. central bank, which raised rates in March, is widely expected to deliver another rate hike this week, but investors are looking for cues on whether the Fed is planning a total of three or four rate increases this year. The European Central Bank and the Bank of Japan also review monetary policy this week. The Nikkei Asia300 gauge ended little changed on Tuesday after a meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un ended with the Asian state agreeing to denuclearize the Korean peninsula.

“With the U.S.-North Korea summit out of the way market attention turns to the interest rate decisions from three key central banks due over the rest of the week,” Michael McCarthy, chief market strategist at CMC Markets, wrote in a note. “The Fed is almost certain to hike. The accompanying statement could be more influential. Market pricing indicates traders are split between a total of three or four interest rate rises this year, and any shift in this perception will echo through global markets.”

Mainland lenders Industrial & Commercial Bank of China (ICBC), China Construction Bank (CCB) and Bank of China (BOC) fell 1.7%, 1.2% and 1.4%, respectively in Hong Kong. The losses came after data released on Tuesday showed new Chinese bank loans fell to 1.15 trillion yuan ($179.7 billion) in May, down from April’s 1.18 trillion yuan. Analysts polled by Reuters were expecting mainland lenders to have extended new loans worth 1.2 trillion yuan for the month.

Anhui Conch Cement slid 2.7% after the construction materials company on Tuesday said its unit Anhui Tongling Conch Cement has suspended some of its production lines due to environmental concerns.

CK Asset Holdings declined 0.8%. The company is part of a consortium that has made a $9.9 billion offer for Australian pipeline company APA Group. The group also included CK Infrastructure Holdings and Power Assets Holdings. CK Hutchison Holdings, which is CK Infrastructure’s controlling shareholder, lost 2.2%.

ZTE tumbled 41.6% in Hong Kong and by the maximum permitted 10% in Shenzhen as trading resumed after the Chinese telecommunications-equipment provider agreed to pay a $1.4 billion penalty to lift a ban on the supply of American-made components to the company. ZTE shares in both markets have been on a halt for almost two months.

Tata Consultancy Services climbed 2.4% in Mumbai on Wednesday after the software services exporter said its board will consider a share buyback proposal when it meets this Friday.

- By V. Phani Kumar;; +852 39605150
- Edited by Suzannah Benjamin
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