HONG KONG (Nikkei Markets) -- Hong Kong shares headed higher on Wednesday, with property developers and financial heavyweights rallying in midmorning trading amid speculation the local government could relax housing policies to ease unrest in the city.
The Hang Seng Index added 1.4% to 27,044.87 by noon, poised for a close above 27,000 for the first time since Aug. 1. HSBC Holdings climbed 2.6%, contributing about a fifth of the index's gains by points, while China Construction Bank added 2.5%. Among the city's developers, Sun Hung Kai Properties rose 3.4%, CK Asset Holdings gained 3.3% and Henderson Land Development advanced 3.1%.
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.
"People may be betting on a new property and housing policy in Hong Kong," said Frankie Chan, senior research analyst at Emperor Securities.
With Wednesday morning's advance, the Hang Seng Index was headed for its best single day gain since Sept. 4, when Hong Kong Chief Executive Carrie Lam announced the withdrawal of a controversial extradition bill that sparked months of protests in the city. 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 was flat by midday, while the yuan traded onshore was little changed against the dollar at 7.1141.
CK Hutchison Holdings added 2%, taking gains this week to 7%. 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.
Apple supplier AAC Technologies Holdings rose 1.8% 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%.
Mainland developer Ground International Development jumped 197% to HK$0.30 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 2.6% following a 27% increase in August contracted sales.
Chinese private education group Edvantage Group Holdings climbed 0.3% after the company said it expects to report a significant increase in consolidated profit from continuing operations for the year ended in August.
-- Benny Kung