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Nikkei Markets

Hong Kong shares claw back some losses after sell-off

Brilliance loses a fourth of its value on planned stake sale in BMW venture

HONG KONG (Nikkei Markets) -- Hong Kong stocks on Friday headed cautiously higher alongside broad gains in Asia, helped by a bounce for heavyweight Tencent Holdings after 10 straight days lower.

The Hang Seng Index rose 1.2% to 25,563.53 by noon. Social-media major Tencent advanced 5.1% following a losing streak that wiped off 19.1% of its value. Its unit Tencent Music Entertainment Group will postpone a U.S. initial public offering, The Wall Street Journal reported, citing people familiar with the matter. Smartphone components maker Sunny Optical Technology Group jumped 7.7% after saying its September shipments increased 61.2% for handset lens sets and 71% for handset camera modules.

Most other equity benchmarks in Asia also rose, with the Nikkei Asia300 Index of regional companies climbing 2%, on course for its first gain in nine days. Recent market losses have been fueled by concerns over the ongoing Sino-American trade war and a jump in U.S. bond yields, with the latter being driven by upbeat economic data and expectations for further interest rate increases. The yield on 10-year U.S. Treasury notes, which repeatedly set seven-year highs recently, fell nine basis points to 3.131% on Thursday.

The rebound is "pretty week" after the Hang Seng Index's 3.5% tumble on Thursday, said Ricky Huang, an analyst at Luk Fook Financial Services. Still, it was unlikely that the advances will fizzle out as stocks were experiencing "less selling pressure, with some capital entering the market" because of technical indicators showing that the market had been oversold, he said.

The Hang Seng Index's Relative Strength Index, a measure of momentum, fell below 30 on Thursday, a threshold that signals to some technical analysts that a market may be poised to recover.

Huang said he expects the gauge to move higher for the next two to three days, although it will be "hard to fully recover" Thursday's losses.

In the mainland, the Shanghai Composite was down 0.1% in the morning session after falling as much as 1.8% earlier. The onshore traded yuan lost 0.2% against the U.S. dollar to 6.9007.

Data released Friday showed China's exports grew 14.5% in September from a year earlier, while imports rose 14.3% last month. The increases came despite a third round of U.S. tariffs on Chinese goods that took effect last month.

U.S. President Donald Trump and Chinese President Xi Jinping plan to meet at the G-20 summit of the world's top developed and developing nations in Argentina next month, The Wall Street Journal reported, citing officials from both countries.

Brilliance China Automotive Holdings slumped 24.5% to HK$8.12 as trading resumed after a one-day halt. The company said on Thursday that it has agreed to sell a 25% stake in a joint venture with BMW Group to the German automaker for 29 billion yuan ($4.2 billion), and that it could potentially use proceeds to pay a special dividend or for other corporate purposes. Nomura maintained its Buy rating on the stock, saying the overhang of the joint-venture negotiations had passed, but cut its price target to HK$12.80 from HK$17.20.

Gemdale Properties & Investment climbed 1.6% following a 24.1% increase in contracted sales for September to 5.63 billion yuan.

Hopson Development Holdings rose 2.3% after reporting an 87.5% jump in September contracted sales. The developer also said it agreed to buy the 49th floor of The Center office building in Hong Kong for up to HK$1.17 billion ($149.3 million).

ANTA Sports Products jumped 3.6% after saying retail sales value of ANTA branded products rose in the "midteens" in the third quarter while sales for other branded products jumped up to 95%.

-- Amy Lam

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