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Nikkei Markets

Chinese stocks drag Hong Kong market lower

China Mobile slips after reporting revenue and profit decline

HONG KONG (Nikkei Markets) -- Hong Kong shares headed lower on Wednesday, weighed down by losses for Chinese companies, despite an advance on Wall Street overnight that lifted two major U.S. indexes to record highs.

The Hang Seng Index had shed 0.9% to 29,709.45 by noon after rising as much as 0.5% earlier. China Construction Bank and social media major Tencent Holdings, both heavyweights on the 50-stock gauge, fell 1.3% and 0.7%, respectively.

China Mobile, the nation's largest mobile network provider, declined 1.2% following an 8.3% decrease in March quarter net profit and a 0.3% slippage in revenue. Smaller rival China Unicom (Hong Kong) reversed direction to dip 0.6% after rising as much as 2.3% earlier. The company had reported a 22% increase in first-quarter net profit late on Tuesday.

The Hang Seng China Enterprises Index of large mainland companies listed in the city fell 1%. In the mainland, the Shanghai Composite Index lost 0.9%. The Shanghai gauge is down more than 3% so far this week. It had gained 2.6% last week, when Beijing reported better-than-expected first-quarter growth numbers. The yuan traded onshore was little changed against the U.S. dollar at 6.7236.

"There are fewer hopes of further monetary easing from China" after recent economic data, said Andy Wong, chief investment strategist at LW Asset Management. "It is hard to pick a theme for buying at the moment."

The Hang Seng Index needs "new catalysts" around the 30,000-point level, he added.

Early gains for the Hang Seng Index had come after the S&P 500 Index and the Nasdaq Composite closed at record highs on Tuesday, helped by better-than-expected March quarter earnings.

Meanwhile, markets continue to watch for developments on Sino-American trade discussions that have yet to lead to a resolution of their dispute. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing next Tuesday to meet Chinese Vice Premier Liu He for another round of trade talks. Liu He will lead a delegation to Washington the week after that.

Hotel and gaming business operator Summit Ascent Holdings jumped 9.5% in Hong Kong after a unit of resort management company Suncity Group Holdings agreed to buy a 24.7% stake in the company for HK$717.8 million ($91.5 million) from two sellers. Suncity added 1.3%.

TCL Electronics Holdings, a unit of conglomerate TCL, added 2.5%. The company on Tuesday reported a 15.8% increase in January-March quarter turnover.

-- Amy Lam

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