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Asian Shares Retreat As Fed Hopes Fade

Asian stocks retreated on Monday as strong U.S. jobs data tempered expectations for a near-term interest rate cut by the Federal Reserve.

Geopolitical tensions also dented sentiment after Iran said it would break a limit set on uranium enrichment under its 2015 nuclear accord with major world powers.

China's Shanghai Composite Index plummeted 77.70 points or 2.6 percent to 2,933.36 as U.S.-China trade talks resume with phone calls. Hong Kong's Hang Seng Index tumbled 443.14 points or 1.5 percent to 28,331.69.

As officials try to resolve a yearlong trade war, Chinese Vice President Wang Qishan warned against "protectionism in the name of national security, and called on major powers to make more contributions to global peace and stability.

Meanwhile, China's foreign exchange reserves increased marginally in June, data from the People's Bank of China showed. Foreign exchange reserves rose by $18.2 billion to $3.119 trillion at the end of June from $3.101 trillion at the end of May.

Japanese shares fell as Fed rate cuts hopes faded and weak machinery orders data fanned concerns about domestic demand. The Nikkei 225 Index ended down 212.03 points or 1 percent at 21,534.35, while the broader Topix closed 0.9 percent lower at 1,578.40.

Core machine orders in Japan were down 7.8 percent sequentially in May, the Cabinet Office said in a report. That missed expectations for a decline of 3.7 percent following a 5.2 percent increase in April. On a yearly basis, core machine orders fell 3.7 percent versus expectations for a drop of 3.6 percent.

Japan's trade surplus for May beat expectations, while overall bank lending figures for the month came in line with estimates.

Market heavyweight SoftBank declined 1.7 percent and Fanuc shed 0.9 percent. Banks bucked the weak trend to end on a flat note after U.S. Treasury yields rose.

Australian markets pulled back sharply to suffer their biggest intraday fall in five weeks, with banks and miners pacing the declines. The benchmark S&P/ASX 200 Index dropped 79.10 points or 1.2 percent to 6.672.20, while the broader All Ordinaries Index ended down 74.40 points or 1.1 percent at 6,757.40.

Lower iron ore prices weighed on the mining sector, with BHP declining 1.8 percent and Rio Tinto losing 1 percent.

Gold miners also came under selling pressure as bullion fell in the face of a stronger dollar. Newcrest Mining shed 0.8 percent and Northern Star gave up 1.9 percent.

The big four banks fell between 0.9 percent and 1.2 percent on concerns that lower interest rates will crunch their profit margins. In the healthcare sector, CSL declined 1.5 percent and Cochlear lost 2.2 percent.

On the data front, Australian job ads grew by a seasonally adjusted 4.6 percent in June, reversing a 8.2 percent nosedive in May, data from ANZ showed. The increase was the biggest since January 2018.

Seoul stocks tumbled as a row over forced wartime labor threatened to disrupt global supplies of South Korean memory chips and smartphones.

The Kospi ended down 46.42 points or 2.2 percent to 2,064.17. Tech giant Samsung Electronics plunged 2.7 percent and SK Hynix dropped 1.5 percent.

New Zealand shares fluctuated before ending little changed with a negative bias, dragged down by dual-listed banks. Heavyweight A2 milk jumped as much as 2.2 percent.

U.S. stocks fell from record highs on Friday, as a strong monthly jobs report dented hopes for a near-term interest rate cut by the Federal Reserve.

The Dow Jones Industrial Average and the S&P 500 both slipped 0.2 percent, while the tech-heavy Nasdaq Composite edged down 0.1 percent.

The latest jobs report showed U.S. employment surged up by 224,000 jobs in June after edging up 72,000 jobs in May. Economists had expected employment to increase by about 160,000 jobs.

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