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Hong Kong shares slip in choppy trade amid profit-taking

Chinese banks gain while oil companies decline amid fall in US crude prices

HONG KONG (Nikkei Markets) -- Hong Kong shares edged lower in a choppy morning session on Tuesday, as investors appeared to take profits after a rebound from the impact of new U.S. import tariffs.

The Hang Seng Index had lost 0.3% to hit 31,507.76 by the noon lunchbreak after earlier changing direction at least four times. Tencent Holdings, the most valuable company listed in Hong Kong, declined 0.7%. Apple supplier AAC Technologies Holdings fell 1.1% after rising 7.8% over the last three days while Sunny Optical Technology Group, which also supplies components to the iPhone maker, snapped a five-day winning streak to slip 0.2%. Offshore oil producer CNOOC fell 2.6% after U.S. crude prices declined 1.1% overnight while PetroChina shed 0.6%.

The Dow Jones Industrial Average and the S&P 500 Index snapped two days of gains overnight while the technology-heavy Nasdaq Composite continued a seven-day run of gains.

"Hong Kong equities lack direction today as the Hang Seng Index has already rebounded about 1,800 points, and some market participants are locking in profits," said Jason Lee, vice president for stocks at investment consultancy Investment Strategy Institute in Hong Kong. The Hang Seng earlier in the month sank below 30,000 following U.S. President Donald Trump's announcement of plans to impose import tariffs on steel and aluminum. "Trade war uncertainties are still lingering as Trump's behavior cannot be predicted," Lee said.

Markets are looking ahead to the outcome of the U.S. Federal Reserve's two-day policy review next week, Jerome Powell's first since he took over as chairman of the central bank in February.

Agricultural Bank of China (ABC) jumped 5.2% on Tuesday in Hong Kong, making it the top gainer on the Hang Seng China Enterprises Index, after the lender said its plans to raise up to 100 billion yuan ($15.8 billion) from a private placement of its Shanghai-listed A-shares. The stock was up 2.5% in mainland trading while the Shanghai Composite slipped 0.2%.

ABC reported a 4.9% increase in 2017 net profit and a drop in its non-performing loan ratio to 1.81% from 2.37% a year earlier.

"Chinese banks are doing well, as ABC delivered results that shows the bad debt situation is getting better, thus people have some hopes for other Chinese banks," Lee said.

Industrial & Commercial Bank of China (ICBC) and China Construction Bank (CCB) rose 1.3% and 0.6%, respectively.

China Longyuan Power Group added 2.6% after reporting an 8% increase in 2017 net profit to 3.69 billion yuan and a 10.3% jump in revenue.

Asset manager Value Partners Group climbed 9.4% following a near 15-fold increase in net profit for 2017. Revenue for the year nearly tripled to HK$4.11 billion ($524.3 million).

Chinese pork producer Huisheng International Holdings fell 1.7% after indicating it will report a "substantial" decrease in profit for 2017.

Production equipment maker Unisplendour Technology Holdings surged 12.9% after saying it expects to report a profit for 2017.

-- Amy Lam

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