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Asian Equities Continue to fall; Australia’s GDP Report in Focus

Asian equities continued to fall in afternoon trade - Asian equities continued to fall in afternoon trade on Wednesday. Australia’s Q2 GDP report took center stage as data showed growth in the Australian economy accelerated in the second quarter of 2018.

The ASX was down 0.9% by 1:45AM ET (05:45 GMT) despite data showed the Australian economy grew by 0.9% quarter-on-quarter, compared with the estimated growth rate of 0.7%, the Australian Bureau of Statistics reported on Wednesday.

Net exports contributed 0.1% points during the quarter to the GDP growth and the household final consumption expenditure increased 0.7%, contributing 0.4% points to GDP growth.

On a year-on-year basis, growth in the Australian economy accelerated to 3.4%, again beating forecasts of a slowdown to 2.8%.

Meanwhile, China’s Shanghai Composite and the SZSE Component were both down 0.7% as growth in China’s service sector weakened again in August.

For August, the Caixin/Markit services purchasing managers' index (PMI) fell to 51.5, the lowest in 10 months, from July's 52.8.

The U.S.-China trade dispute remained in focus as the public comment period on a new round of U.S. tariffs on $200 billion more of Chinese goods were due to end on Thursday.

"Trump does what he says he'll do in one form or another, so I expect tariffs will be implemented," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.

"Markets will be surprised if he doesn't do anything," she said.

Hong Kong’s Hang Seng Index underperformed its regional peers and was down 2.0%. China Communications Const-H (HK:1800) (CCCC) raised some eyebrows after the company’s head of overseas business Li Qingwei said in an earnings conference on Tuesday that he now expects the company to get back a cancelled multi-billion-dollar contract to build a railway in Malaysia.

The contract was a major win for the company’s 2017 order book but was later cancelled. The construction company now expects that talks between Chinese President Xi Jinping and Malaysian Premier Mahatir Mohamad could get the project back on track.

Overnight, was in focus in the U.S. as its stocks fell as much as 7% on reports that founder and CEO of the company Richard Liu was arrested in Minneapolis last week following an allegation of rape.

Elsewhere, Japan’s Nikkei 225 was down 0.4% as data showed the Markit/Nikkei Japan Services Purchasing Managers Index (PMI) increased to 51.5 on a seasonally adjusted basis from 51.3 in July.

In other news, Mexican Economy Minister Ildefonso Guajardo said he hoped U.S. and Canada could agree on a deal by Friday to enable a three-way accord in the renegotiation of the North American Free Trade Agreement (NAFTA).

"I would hope that there will be white smoke for this Friday," Guajardo told Mexican radio on Tuesday.

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