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Nikkei Markets

Financial heavyweights lead Hong Kong shares higher

Apple suppliers climb after new iPhone launches

HONG KONG (Nikkei Markets) -- Hong Kong shares ended higher on Wednesday, with the city's main equity gauge clinging to early gains sparked by speculation that the local government may act to ease protests.

The Hang Seng Index added 1.8% to 27,159.06, closing above 27,000 for the first time since Aug. 1. HSBC Holdings climbed 3.1%, contributing about a fifth of the index's gains by points, while China Construction Bank added 2.8%.

Wednesday's gains picked up pace in mid-morning trading after the South China Morning Post was cited on social media as reporting that Hong Kong Chief Executive Carrie Lam was set to respond to another one of the city's demands, after withdrawing a controversial extradition bill last week.

SCMP later denied publishing such a report.

Still, local developers were among big gainers on Wednesday, with Sun Hung Kai Properties and CK Asset Holdings rising 3.2% and 3%, respectively, while Henderson Land Development advanced 4.3%.

"Overall sentiment in the market has improved," said Steven Leung, executive director at UOB Kay Hian (Hong Kong). The market "is going to rebound more, no matter what the news is."

The Hang Seng Index has risen 5.6% so far this month following the withdrawal of the bill that sparked monthslong protests in the city. Expectations for more support from China after the nation's central bank cut banks' reserve requirements for a third time this year have also helped. The gauge had slumped 7.4% in August.

Shares of local property developers have been among the worst hit since mass demonstrations began in the city in June, weighing on property prices and commercial rents as retail sales and inbound tourist numbers were affected by the unrest. While housing affordability is not among the protesters' demands, some media reports have cited high property prices as a main grievance.

Speculation over the possibility of a new property and housing policy in Hong Kong also supported stocks this morning, according to analysts.

Meanwhile, markets are also looking ahead to the next round of high-level Sino-American trade talks, scheduled for early October in Washington.

China is expected to agree to buy more U.S. agricultural products as it hopes for a better trade deal with the U.S., the South China Morning Post reported, citing a source familiar with the situation.

The U.S. and China on Sept. 1 imposed a new round of punitive tariffs on goods imported from each other. The U.S. has said it will raise an existing 25% tariff on some Chinese goods to 30% on Oct. 1, and has threatened to impose new levies on Dec. 15, which would effectively cover all Chinese goods imported to the U.S.

In the mainland, the Shanghai Composite Index slipped 0.4%, while the yuan traded onshore edged 0.1% lower against the dollar to 7.1169.

Apple supplier AAC Technologies Holdings rose 1.5% in Hong Kong amid broad market gains. The iPhone maker on Tuesday unveiled its new phone called the iPhone 11, which will have three variants, with prices starting at $699. Cowell e Holdings, which also supplies parts to Apple, added 3.3%.

CK Hutchison Holdings added 2.1%. Bloomberg this week reported, citing people with knowledge of the matter, that the diversified conglomerate was weighing combining its Indonesian telecommunications business with that of Kuala Lumpur-listed Axiata Group.

Mainland developer Ground International Development jumped 98% to HK$0.20 as it resumed trade after a day's halt. The stock had slumped 40.6% before it was halted on Monday afternoon. The reason for the surge was not immediately clear.

Longfor Group Holdings advanced 3.2% following a 27% increase in August contracted sales.

-- Benny Kung

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