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Markets

Hong Kong shares slip with US Fed meeting in focus

Meituan Dianping up after Goldman Sachs raises target price

HONG KONG (Nikkei Markets) -- Hong Kong shares slipped on Wednesday, weighed down by losses for energy producers while heavyweight financial stocks edged higher ahead the U.S. Federal Reserve's policy review.

The Hang Seng Index slipped 0.1% to 26,754.12. Energy producers CNOOC and PetroChina shed 1.4% and 1.6%, respectively, after Brent crude prices declined 6.5% overnight after a 14.6% jump on Monday. The retreat for oil prices came after Saudi Arabia said it will restore lost oil production by the end of the month following an attack on the nation's oil facilities. London-headquartered lender HSBC Holdings added 0.2%, while pan-Asia insurer AIA Group rose 0.7%.

Meanwhile, Apple supplier AAC Technologies Holdings jumped 10.2% to HK$44.40. The reason for the surge was not immediately clear.

Turnover on the stock exchange's main board was at 59.50 billion Hong Kong dollars ($7.60 billion), lower than usual.

The U.S. Federal Reserve is widely expected to deliver a 25-basis-point rate cut later on Wednesday, its second reduction this year. The central bank started easing monetary policy in July as growth in the world's largest economy shows signs of easing amid a tit-for-tat trade war with China.

"The Fed cutting rates by 25 basis points is within expectations," said Stevan Tam, associate director at Fulbright Securities. "The local market does not seem to have any favorable news. It is still overshadowed by social factors."

Investors continue to watch political developments in Hong Kong, as the monthslong pro-democracy protests show few signs of easing.

In the mainland, the Shanghai Composite Index rose 0.3%.

The People's Bank of China on Tuesday extended 200 billion yuan ($28.3 billion) of one-year medium-term lending facility (MLF) loans, less than the 265 billion yuan in loans maturing, and kept the one-year MLF rate unchanged at 3.3%, according to Reuters. The PBOC will likely cut rates before the end of the month," Fullbright Securities' Tam added.

China's central bank earlier this month announced a reduction to the amount of cash banks must hold as reserves by 50 basis points for all lenders, its third reserve requirement ratio cut this year.

Meanwhile, a round of deputy-level Sino-American trade talks is scheduled to start in Washington on Thursday, ahead of high-level talks in October. The meeting next month is expected to involve U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He.

Chinese food-delivery company Meituan Dianping added 4.7% to HK$75.40 in Hong Kong. Goldman Sachs reiterated its "buy" rating on the stock and lifted its target price to HK$97.50 from HK$85, saying the company has "further solidified its leading position in China's addressable consumer services market."

Metal recycling company China Environmental Resources Group rose 3.8% after saying it expects its consolidated loss for the year ended June 30 to narrow from a year ago.

United Laboratories International Holdings climbed 1.1% after the medicine distributor said its unit received approval notice from China's National Medical Products Administration for the clinical trial of a long-acting insulin degludec injection.

Clothing retailer Esprit Holdings fell 1.4% ahead of its annual results announcement.

--Benny Kung

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