HONG KONG (Nikkei Markets) -- Hong Kong shares gave up early gains in a choppy morning session on Monday, as investors appeared to take profits after the city's record-setting main equity index capped a seventh consecutive weekly advance on Friday.
The Hang Seng Index had slipped 0.04% to 33,142.51 by the noon lunchbreak, after rising as much as 1% earlier in the session. Heavyweight Ping An Insurance Group slid 2.3%, while HSBC Holdings declined 0.4%. Apple suppliers AAC Technologies Holdings and Sunny Optical Technology Group fell 2.6% and 3.3%, respectively, pacing losses for the gauge.
The Hang Seng Index, which has breached record highs repeatedly this month, has closed lower only twice in the previous 24 trading days. It had risen as high as 33,484.08 earlier on Monday, after upbeat corporate earnings drove U.S. equity indexes to record highs on Friday.
Kenny Wen, wealth management strategist at Everbright Sun Hung Kai, said the retreat "is likely coming from some profit-taking orders at high index levels, as volatility picks up after the gauge climbed over 33,000." He said the reversal also followed a pullback in mainland Chinese equities.
In mainland China, the Shanghai Composite Index fell 0.5%, while its Shenzhen counterpart gave up 1.4%. The yuan traded onshore slipped 0.1% to 6.3230 against the U.S. dollar. The Nikkei Asia300 Index edged 0.1% higher.
Hong Kong's main equity gauge is on course to deliver its best January since 1996, with a month-to-date gain of 10.8% as mainland investors continue to pump money into the city's stocks amid relatively attractive valuations. The Hang Seng China Enterprises Index of large mainland companies listed in the city was up 0.5% to 13,792.28, trading near its highest level since June 2015.
Industrial & Commercial Bank of China (ICBC), China Construction Bank (CCB) and Bank of China (BOC) rose 2.2%, 1.4% and 1.5%, respectively, ranking among the five most actively traded stocks in Hong Kong on Monday.
"Chinese banks have performed strongly in recent days, as they are still undervalued. An economic recovery will prompt further improvement in their bad-debt ratios and a rerating of their price-to-book ratio," Wen said.
Chinese automaker Great Wall Motor added 4.1% in Hong Kong, despite saying it expects net profit for 2017 to fall 58.4% from a year earlier.
Honma Golf jumped 4.3%. The golf club and accessories maker said its controlling shareholder Kouunn Holdings sold a 16.29% stake to two strategic investors, Japan's Itochu and Thailand's Charoen Pokphand Group, for a total 834.2 million Hong Kong dollars ($106.7 million).
CRCC High-Tech Equipment tumbled 3.7% after the railway-track maintenance-machine maker on Friday said it expects net profit for 2017 to decline around 85% to 91% from the previous year due to lower revenue.
Ulferts International jumped 178% to HK$1.56 in its trading debut after the furniture retailer raised HK$112 million in gross proceeds from an initial public offering.
-- Amy Lam