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Nikkei Markets

Chinese companies help push Hong Kong stock market higher

Guangzhou Automobile boosts H-share index after upbeat results

HONG KONG (Nikkei Markets) -- Hong Kong shares rose on Tuesday, as gains for mainland Chinese companies listed in the city helped erase early losses stemming from ongoing worries over a trade war between the world's two largest economies.

The Hang Seng Index ended 0.3% higher at 30,180.10, after having fallen as low as 29,755.36 earlier in the day. The market reopened on Tuesday after a four-day holiday weekend. Personal-hygiene product maker Hengan International Group Company jumped 8.3%, leading gains on the 50-stock gauge in percentage terms. The reason for the advance was not immediately clear. Tencent Holdings, the most valuable company listed in Hong Kong, slipped 0.1% for its third consecutive decline, while Apple supplier Sunny Optical Technology Group lost 0.8% after the technology heavy Nasdaq Composite shed 2.7% overnight.

Guangzhou Automobile Group jumped 9.4% to lead the Hang Seng China Enterprises Index, known as the H-share index, of large mainland companies listed in Hong Kong 1.2% higher. The automaker on Friday reported a 75% surge in 2017 net profit. Revenue rose 44.8% for the year.

In the mainland, the Shanghai Composite Index shed 0.9% as concerns of a trade war between China and the U.S. intensified after Beijing on Sunday detailed plans to increase import tariffs on 128 U.S. products, in an apparent retaliation to President Donald Trump's move to impose tariffs on $60 billion worth of Chinese products. Fears of a global trade war and weakness in U.S. technology stocks drove Hong Kong's main equity index down 2.4% in March, trimming gains for the first quarter to 0.6%.

"The Sino-U.S. trade war may not just shadow the stock market for this quarter, but probably for the whole year," said Mark To, managing director at Wing Fung Financial Group.

Casino operator Galaxy Entertainment Group rose 2% after data released on Sunday showed gaming revenue in Macau increased 22% in March. Sands China ended 0.7% higher.

"Individual sectors may defy the market trend, [and] Macau gambling stocks can outperform the market in the short term," said Stanley Chik, head of research at Bright Smart Securities.

Alibaba Group Holding fell 3.2% in New York on Monday. The Chinese e-commerce major said it agreed to acquire the shares it does not already own in Ele.me, in a deal that values the online food delivery company at $9.5 billion. Alibaba, together with affiliate Ant Small and Micro Financial Services Group, already holds about a 43% stake in Ele.me.

COSCO Shipping Holdings added 0.3% after falling as much as 3.6% earlier in the day. Last Thursday, the company reported a profit of 2.66 billion yuan ($423.5 million) for 2017, compared with a loss of 9.91 billion yuan a year earlier. Revenue rose 29.5%. Analysts at Jefferies maintained their "hold" rating on the stock, saying that while net profit was broadly in line with consensus expectations, it was below their estimate of 3 billion yuan.

China Railway Construction Corp. rose 4.6%. Late Thursday, the company reported a 14.7% jump in 2017 net profit and an 8.2% increase in revenue.

China Communications Construction Co. climbed 4.1% after reporting a 21.7% increase in 2017 net profit over the weekend.

Joy City Property ended 4% higher at HK$1.32, after rising as much as 13.5% to HK$1.43 in the morning session. The developer on Monday said Shenzhen-listed COFCO Property Group has agreed to buy 64.2% of the company from its controlling shareholder Vibrant Oak for 14.76 billion yuan.

-- Benny Kung

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