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Equities

Tech stocks advance, keeping Hang Seng Index at 10-year highs

Geely, Tencent rise, while H-share gauge at two-and-a-half year high

HONG KONG (Nikkei Markets) -- Hong Kong shares ended at a 10-year high for a second day, as technology stocks climbed after the Nasdaq Composite Index in the U.S. closed above 7,000 points for the first time ever overnight.

The Hang Seng Index closed 0.2% higher at 30,560.95, its highest level since November 2007. Geely Automobile Holdings, 2017's top-performing index constituent, added 3.7% to lead gains on the gauge. Ping An Insurance Group lost 1.4% after jumping 4.5% on Tuesday.

Tencent Holdings, Hong Kong's most valuable company, climbed 1.1%. Apple supplier AAC Technologies Holdings rose 1.8% after a 7.5% jump on Tuesday, while lens-module maker Sunny Optical Technology Group, which also supplies to the iPhone maker, ended 0.4% higher.

Helen Zhu, head of China equities at investment firm BlackRock, said she was underweight on technology sector stocks, as profit expectations were already very high last year.

"I don't think the demand for Apple supply chain industries is as fancy as the public thinks. We're optimistic on individual internet stocks though," she said.

The Hang Seng Index also saw its 14-day relative strength index rise above 70 for the first time since November this week, a signal to some analysts that the gauge maybe overbought.

Gains for Hong Kong were in line with the rest of the region, with the Nikkei Asia300 Index rising 1%. The Shanghai Composite closed 0.6% higher at 3,369.11 on Wednesday, the highest since Nov. 22.

"For now, the temporary resistance level (for the Hang Seng Index) everyone watching is 31,000 points. Some profit-taking orders may appear when the Shanghai Composite reaches 3,400 points, so the rally in the first two weeks of 2018 may not be strictly upward," said Jason Lee, vice president for stocks at investment consultancy Investment Strategy Institute in Hong Kong.

Lee expects the Hang Seng Index to rise as high as 34,500 points in 2018, peaking in the second quarter when MSCI's inclusion of A-shares to its indexes is expected to bolster investor sentiment.

Air China jumped 6.8% after a 1.6% retreat on Tuesday, leading a gauge of mainland companies listed in the city 0.2% higher.

Midas Holdings, a Singapore-based aluminum alloy product maker, surged 435.9% in Hong Kong after saying its 32.5%-owned joint venture CRRC Nanjing Puzhen Rail Transport had secured three metro train car supply contracts worth 2.68 billion yuan ($412.2 million). Midas shares climbed 40.5% in Singapore.

Shares of National Investments Fund slid 2.3% after it said a rights issue of 1.2 billion shares was under-subscribed by 38.72%.

Alibaba Group Holding affiliate Ant Financial's plans to buy U.S. money transfer company MoneyGram International came to a halt after a U.S. government panel rejected the deal, Ant Financial and MoneyGram said in a joint statement on Tuesday after U.S. markets closed. Ant Financial paid MoneyGram $30 million as deal termination fee. Alibaba shares had risen 6.5% in New York overnight.

--Amy Lam

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