HONG KONG (Nikkei Markets) -- Hong Kong shares rose to a one-month high on Wednesday, as optimism over Sino-American trade relations grew after U.S. President Donald Trump said he will have an extended meeting with China's Xi Jinping later this month.
The Hang Seng Index climbed 2.6% to 28,202.14, its highest close since May 14. Heavyweights AIA Group and Tencent Holdings rose 4.3% and 4% respectively, collectively contributing more than 200 points to the gauge's gains. Pork producer WH Group, which has significant business interests in the U.S., jumped 5.3%.
Sunny Optical Technology Group surged 10.1% to HK$79.50, leading percentage gains on the index. The supplier to Huawei Technologies had slumped about 30% in May after the U.S. said it would add the Chinese company to a list of entities that need government approval to buy components and technology from American companies. Apple supplier AAC Technologies Holdings added 4.5%.
Among other gainers in the technology hardware space, Chinese telecommunications equipment maker ZTE and mobile phone parts maker Q Technology (Group) advanced 7.4% each, while personal-computer maker Lenovo Group rose 3.5%.
The Dow Jones Industrial Average and the Nasdaq Composite rose 1.4% each on Tuesday, after Trump said on Twitter that he had a "very good" telephone conversation with Chinese President Xi, adding that the two would have an "extended meeting" at a G-20 summit in Japan next week. The news was later confirmed by Beijing. Trade talks between the U.S. and China last took place in Washington in early May.
Tai Hui, chief market strategist for Asia Pacific at JP Morgan Asset Management, said the news "should raise hopes that both sides could return to negotiation."
"Given the deadlock in the past month, I think a commitment to talk would be the most likely outcome," he said.
Some analysts were circumspect.
The rally is an "overreaction," said Daniel So, strategist at CMB International Securities. "The best possible outcome is they restart trade negotiations, and Trump pauses on the final tariff hike on $300 billion of Chinese goods. This news cannot justify an over 600-point rally."
Markets also await the outcome of the U.S. Federal Reserve's two-day policy review that concludes later on Wednesday.
In the mainland, the Shanghai Composite Index added 1%, while the yuan traded onshore was little changed at 6.9039 against the dollar.
Want Want China Holdings rose climbed 3.4%, extending Tuesday's 1.7% advance after the food and beverage company reported an increase in full-year profit. The company late Tuesday said its unit agreed to acquire egg producer Poyang County Linwang Forestry Development for 50 million yuan ($7.24 million).
Hypermarket operator CP Lotus rose 3% to HK$0.103 after saying its controlling shareholder CP Holding (BVI) Investment offered to take it private by paying shareholders 11 Hong Kong cents (1 cent) in cash per share.
Wuxi Biologics declined 3% to HK$70.85. The company on Wednesday said its controlling shareholder has agreed to place 55 million existing shares, representing 4.44% of its total issued share capital, at HK$69.30 each.