HONG KONG (Nikkei Markets) -- Hong Kong shares rose on Thursday, led by gains in financial heavyweights, with fresh expectations for a Sino-American trade deal helping sentiment.
The Hang Seng Index added 0.4% to 26,041.93. HSBC Holdings increased 0.6%, while China Construction Bank and Industrial & Commercial Bank of China advanced 1% each. The three lenders contributed more than half the gauge's gains by points.
Hong Kong-based property developer New World Development climbed 2%. The company on Wednesday said it plans to donate more than a sixth of its farmland to help ease a housing shortage that some believe has contributed to the ongoing protests in the city.
Optimism over Sino-American trade relations grew after U.S. President Donald Trump on Wednesday said a trade deal with China could happen sooner than expected. High-level officials from the U.S. and China are scheduled to meet in Washington next month for a round of trade talks. Separately, Trump and Japanese Prime Minister Shinzo Abe signed a limited trade deal to cut some tariffs on goods both countries import from each other.
However, market participants were unconvinced about the sustainability of Thursday's gains as headwinds lingered.
"The rebound this morning is weak. We still need time to observe and need to be cautious about the gains," said Linus Yip, chief strategist at First Shanghai Securities. "There are still quite a number of negative factors clouding the Hong Kong market, and people will be more cautious before and during the National Day holidays."
Anti-government protests in Hong Kong have gone on for about four months as activists demand more rights, including universal suffrage. More demonstrations are expected in the city on the Oct. 1 National Day holiday that marks 70 years of the Communist Party's rule in China.
Meanwhile, the Trump administration on Wednesday imposed sanctions on some Chinese companies for allegedly shipping Iranian oil. Among the companies affected, Cosco Shipping Tanker (Dalian) Co. and Cosco Shipping Tanker (Dalian) Seaman & Ship Management Co. are units of China's state-backed Cosco Group.
United group holding company Cosco Shipping Corp. and its Hong Kong-listed unit Cosco Shipping Holdings remain unaffected. Cosco Shipping Holdings' shares slipped 0.4%.
In the mainland, the Shanghai Composite Index slipped 0.9%.
Poly Property Group rose 1.5% after saying it agreed to dispose of its entire stake in unit Active Success Consultants and loans to Best Attitude International for 4.3 billion Hong Kong dollars ($548.6 million).
China Art Financial Holdings added 1.5% after sliding 63.9% on Wednesday. The company said it was not aware of any reason for the slump other than a forcible share sale of 94.7 million shares by its controlling shareholder, Intelligenesis Investment.
Property management company A-Living Services jumped 8.4% after saying it plans to buy a 60% stake in CMIG Futurelife Property Management for 1.56 billion yuan ($218.9 million). It also plans to buy 60% of New CMIG after a reorganization for 500 million yuan.
Kingboard Holdings climbed 5.5% after saying it will exercise powers under a general mandate to buy back shares. The chemical products company is currently authorized to buy back up to 108.3 million shares or 10% of its shares in issuance.
Longhui International Holdings slid 17.7%, bringing losses for the week so far to 81.6%. The Chinese catering company on Wednesday said its controlling shareholder Shui Chak Group sold 814.5 million shares.
-- Benny Kung