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Nikkei Markets

Heavyweight stocks drag Hong Kong shares lower

L'Occitane surges after second-quarter sales rise

HONG KONG (Nikkei Markets) -- Hong Kong shares headed lower on Wednesday, dragged down by losses for index heavyweights, amid weak global cues and uncertainty over political leadership in the city.

The Hang Seng Index lost 0.9% to 26,535.17 by noon. Social media and gaming major Tencent Holdings shed 1.9%, while pan-Asia insurer AIA Group declined 1.2%.

U.S. equities retreated overnight after British lawmakers on Tuesday voted against Prime Minister Boris Johnson's proposed timetable to fast-track legislation for a deal to take Britain out of the European Union. The rejection makes Brexit unlikely by Johnson's Oct. 31 target.

The Chinese government is drawing up a plan to replace Hong Kong Chief Executive Carrie Lam with an interim chief executive as the city grapples with anti-government protests, the Financial Times reported on Wednesday, citing people briefed on the deliberations.

"There is still uncertainty," said Stevan Tam, associate director at Fulbright Financial Group, citing the lack of clarity on whether a change in the leadership would ease the monthslong turmoil in the city. "I don't see it as a particularly favorable or unfavorable factor for now."

The report came as demonstrations that have rocked Hong Kong since June showed few signs of easing. The protests, which started with a push to have a controversial extradition bill withdrawn, have evolved into a pro-democracy movement with universal suffrage among activists' demands.

Meanwhile, Hong Kong Financial Secretary Paul Chan on Tuesday unveiled relief measures worth about 2 billion Hong Kong dollars ($255 million) to help support the city's economy, which has been hit hard by the protests.

In the mainland, the Shanghai Composite Index shed 0.3%. Most markets in the region traded lower, with the Nikkei Asia300 Index slipping 0.7%. The Hang Seng Index was leading losses in percentage terms in Asia.

French cosmetics and personal care products company L'Occitane International jumped 14.1% after reporting a 25.5% jump in second quarter sales at reported exchange rates.

Anhui Conch Cement added 1.4% after reporting an increase of 15% in third-quarter net profit from a year earlier, and a 42.4% jump in revenue.

China Railway Construction advanced 2.4% following a 25.1% jump in the value of newly signed contracts for the January-to-September period.

Livzon Pharmaceutical Group slid 3% after reporting a 1.9% year-over-year decrease in third-quarter net profit.

Huaneng Power International added 1.9% following a near tripling of its January-to-September net profit.

Kai Yuan Holdings slid 6.7% after the hotel operator said its unit had agreed to buy an additional 30.88% stake in Beijing Chemical Reaction Engineering Science Technology for 12.4 million yuan ($1.75 million) and provide funding of up to 180 million yuan. Kai Yuan's unit already owns about a 6% stake in Beijing Chemical, which medicinal intermediary products such as dimethyl sulfate, nitromethane and hydroxylamine hydrochloride.

-- Benny Kung

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