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Nikkei Markets

Financial heavyweights push Hong Kong shares higher

Sun Hung Kai Properties slips after reporting decline in full-year profit

HONG KONG (Nikkei Markets) -- Hong Kong shares headed higher by noon on Friday, paced by gains for financial heavyweights, as expectations for growth-supportive measures from global central banks helped lift investor sentiment.

The Hang Seng Index edged 0.4% higher to 27,186.35 by noon. Pan-Asia insurer AIA Group rose 0.8%, while mainland lenders China Construction Bank and Industrial & Commercial Bank of China both advanced 0.7%.

Local property developer Sun Hung Kai Properties slipped 0.8% following a 10.1% decline in profit for the year ended June 30. Revenue slipped 0.4%.

Citywide protests in Hong Kong have continued into a 14th week despite the government's move to withdraw a contentious extradition bill that sparked the demonstrations in June. Activists' demands also include a call to cancel the description of the movement as a riot, drop charges against protesters, conduct an independent committee to investigate police actions during recent clashes and grant universal suffrage.

The Hang Seng Index is receiving a certain amount of support from expectations that China could announce further stimulus before markets open on Monday, said Stanley Chik, head of research at Bright Smart Securities. "Local factors are still guiding market outlook, so the upside is limited."

The People's Bank of China last week announced a reduction to the amount of cash that banks must hold as reserves by 50 basis points for all lenders. The reserve requirement ratio cut was the third such reduction this year.

Markets in China, Taiwan and South Korea are closed on Friday for local holidays. Most other regional equity benchmarks advanced as global central banks increasingly adopt looser monetary policy stances to help economies contend with a slowdown in growth.

The European Central Bank on Thursday cut interest rates to minus 0.5% from minus 0.4%, and revived bond purchases, vowing to buy debt at a pace of 20 billion euros ($22.06 billion) a month, starting November. The move came days before the Federal Reserve's review, where the U.S. central bank is expected to cut interest rates for a second time this year.

Meanwhile, investors' focus is on a keenly awaited round of Sino-American trade talks, due to take place in Washington early October.

U.S. President Donald Trump's administration officials have discussed offering a limited trade agreement to China that could delay or roll back some U.S. tariffs, Bloomberg reported, citing five people familiar with the matter. Earlier this week, Trump said he was postponing the imposition of a 5% additional tariff on Chinese goods by two weeks, while China released a list of U.S. goods that would be exempt from a 25% extra import tariff that was imposed last year.

Market operator Hong Kong Exchanges & Clearing added 0.6% after a 3.5% drop on Thursday following its proposed acquisition of the London Stock Exchange.

Property developer ESR Cayman is re-exploring an initial public offering in Hong Kong, about three months after postponing its 9.76 billion Hong Kong dollar ($1.25 billion) offering. Budweiser Brewing Company APAC also on Thursday refiled an application for a Hong Kong IPO.

China Southern Airlines rose 1.8% after reporting an 8.6% increase in passengers carried for August.

ZhongAn Online P&C Insurance climbed 6.2% after reporting a 19% year-over-year increase in gross written premiums for the January-to-August period.

-- Benny Kung

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