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Nikkei Markets

Hong Kong and Shanghai markets subdued ahead of Fed rate review

Most stocks on new Star Market slide in second day of trading

HONG KONG (Nikkei Markets) -- Hong Kong shares edged higher in subdued trading on Tuesday as investors awaited fresh catalysts ahead of the U.S. Federal Reserve's keenly awaited policy review.

The Hang Seng Index had added 0.1% to 28,402.16 by noon after falling 1.4% on Monday. Financial heavyweights HSBC Holdings and Ping An Insurance Group rose 0.4% and 0.5%, respectively, contributing more than half of the gauge's gains by points.

The local gauge retreated on Monday as investors adjusted their expectations for the size of the U.S. Federal Reserve's widely expected rate cut next week to 25 basis points. Hopes for a 50-basis-point move had risen last week after dovish comments from New York Fed President John Williams. The central bank, which hasn't cut interest rates since the financial crisis of 2008, will review policy on July 30 and 31.

Jason Lee, vice president for stocks at Hong Kong consultancy Investment Strategy Institute, said investors don't appear to have an appetite for speculation at present. The Fed's meeting next week could help a rebound for local property stocks, which have weakened after violent clashes late on Sunday in the city's Yuen Long area, he added.

Trading volumes were weaker than usual, with shares worth 31.95 billion Hong Kong dollars ($4.09 billion) changing hands by noon.

In the mainland, the Shanghai Composite Index edged up less than 0.1%.

Most of the 25 stocks that surged on Monday as they began trading on a newly launched technology board in Shanghai, pulled back in Tuesday's morning session as the buying frenzy witnessed the previous day appeared to cool. Anji Microelectronics Technology (Shanghai), which had soared 400% on Monday, dropped 10.3%, while Shanghai MicroPort Endovascular MedTech slipped 8.3% after surging 242% the previous day.

Anta Sports Products rose 3.4% in Hong Kong after the Chinese sportswear maker and retailer said it expects profit for the January-to-June period to increase at least 25% from a year ago.

Future Land Development Holdings slumped 8.7% after saying its unit Seazen Holdings is in talks with strategic partners for the sale of about 40 projects.

Fosun Tourism Group, a subsidiary of diversified conglomerate Fosun International, climbed 2.3% following a forecast for a profit of at least 450 million yuan ($65.4 million) for the six months ended June 30, compared with a loss of 255 million yuan a year ago.

China Chunlai Education Group advanced 1.9% after the private education provider said its unit won a tender from Suzhou University of Science and Technology to run Tianping College in Jiangsu Province for 800.1 million yuan.

Maanshan Iron & Steel added 3.1% to HK$3.01 after saying its controlling shareholder China Baowu's unit Baosteel Hong Kong Investment offered to acquire all the company's issued H-shares it does not already own, or 22.5% total issued share capital, for HK$2.97 each.

China Railway Group rose 0.7% after the state-owned contractor reported a 10.5% increase in the value of newly signed contracts for the first half of the year.

--Amy Lam

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