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Asian Shares Mixed Despite Trade Deal Optimism

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Asian stocks ended mixed on Tuesday despite optimism over U.S.-China trade talks as U.S. officials held a second day of trade talks with Chinese counterparts in Beijing.

The second day of negotiations coincided with an unannounced visit by North Korean leader Kim Jong Un, with some analysts saying China could use Kim's visit as a bargaining chip in the U.S. trade talks.

China's Shanghai Composite Index fell 0.3 percent to 2,526.46, while Hong Kong's Hang Seng Index rose 0.2 percent to 25,875.45.

Japanese shares ended on a positive note after Amazon and Microsoft fueled a second straight session of gains on Wall Street overnight.

The Nikkei 225 Index gained 165.07 points or 0.8 percent to finish at 20,204.04, and the broader Topix closed 0.4 percent higher at 1,518.43.

Automaker Honda Motor rallied 3.2 percent and Toyota rose 1.2 percent, while banks Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Mizuho Financial advanced between 0.3 percent and 1.3 percent.

Takeda Pharmaceutical climbed 2.3 percent after completing its acquisition of Irish drugmaker Shire plc. Inpex and Japan Petroleum gained around 1 percent after crude oil prices rose more than 1 percent overnight.

Olympus Corp jumped 8.4 percent after Morgan Stanley upgraded the stock's rating to Overweight from Equal-Weight.

South Korean stocks fell as investors monitored the second day of trade talks between the U.S. and China. The benchmark Kospi dropped 0.6 percent to 2,025.27. Samsung Electronics tumbled 1.7 percent after forecasting much weaker than expected fourth quarter results.

On the data front, South Korea posted a current account surplus of $5.06 billion in November, the Bank of Korea said, down from the $9.19 billion surplus in October. The goods account surplus stood at $7.97 billion, down from $11.46 billion in November of 2017.

Australian markets stocks notably higher amid signs that Beijing and Washington may be inching toward a trade deal.

Traders shrugged off weak trade data showing that Australia had a seasonally adjusted merchandise trade surplus of A$1.925 billion in November, shy of expectations for a surplus of A$2.175 billion and down from A$2.316 billion in October.

The benchmark S&P/ASX 200 Index rose 0.7 percent to 5,722.40, while the broader All Ordinaries Index ended higher by 0.7 percent at 5,783.30.

Banks ANZ, NAB and Westpac rose between 0.9 percent and 1.2 percent. Waste management giant Bingo Industries soared 5.7 percent after it offered to sell its Sydney processing plant to address antitrust concerns related to the planned acquisition of Dial-a-Dump.

Gold miner Evolution lost 3.4 percent, St Barbara tumbled 5 percent and Northern Star Resources declined 2.6 percent as dovish comments from the Fed boosted investors' appetite for risk.

Sleep device maker ResMed advanced 1.4 percent after completing the $225 million acquisition of U.S.-based asthma and pulmonary specialist Propeller Health.

New Zealand shares rose modestly, with the benchmark S&P/NZX 50 Index finishing up 0.2 percent at 8,821.15.

U.S stocks rose overnight as the U.S. and China resumed talks on their trade war and Federal Reserve Chair Jerome Powell said the central bank would be "flexible" in its approach to monetary policy.

The Dow Jones Industrial Average rose 0.4 percent, the tech-heavy Nasdaq Composite rallied 1.3 percent and the S&P 500 climbed 0.7 percent.

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