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Nikkei Markets

Hong Kong shares climb despite US tariff rise

Sunny Optical gains after reporting surge in phone part shipments

HONG KONG (Nikkei Markets) -- Hong Kong shares headed higher on Friday, with investors focused on ongoing Sino-American trade talks even as higher U.S. tariffs on Chinese goods took effect.

The Hang Seng Index was up 0.6% to 28,492.87 by noon after climbing as much as 1.8% earlier. Internet services heavyweight Tencent Holdings added 1.5%, while Ping An Insurance rose 1.3% and HSBC Holdings advanced 0.6%. The three stocks contributed to nearly half of the gauge's gains by points.

Sunny Optical Technology Group jumped 4.7% after reporting a 59.9% surge in handset lens set shipments for April and a 36.1% increase in handset camera modules. Pan-Asian insurer AIA Group slipped 0.3%. The company on Friday reported an 18% increase in new business value for the first quarter.

The U.S. on Friday increased tariffs on $200 billion of Chinese goods to 25% from 10%, days after President Donald Trump announced the planned move. Trump's unexpected announcement about increasing the tariffs came after China "broke the deal" that was being negotiated on trade, he said at a campaign rally during the week. Following the increase, China on Friday said it "deeply regrets" the latest tariff hike on Chinese goods, and it will have to take countermeasures.

Investors continue to await a possible Sino-American trade deal as Chinese Vice Premier Liu He leads trade talks in Washington. The first of a two-day round of negotiations concluded on Thursday.

"Given that China still wants to negotiate further, I don't think the deal is broken yet. Hopefully when talks resume, there will be more details or minor tweaks," said Vicks Poon, head of investment advisory at Fubon Bank (Hong Kong).

Poon expects negotiations to "drag on" for a few more months. He does not expect the most recent tariff increase to "harm China much more," adding that the Asian nation is unlikely to "aggressively" loosen fiscal policy in response.

In the mainland, the Shanghai Composite Index climbed 1.5%, while the yuan traded onshore rose 0.3% against the dollar to 6.8065.

Markets in the rest of the region were mixed, while the Nikkei Asia300 Index edged 0.5% higher. U.S. stock futures pointed to a weaker opening on Wall Street Friday.

Great Wall Motor advanced 2.2% in Hong Kong after the Chinese carmaker reported a 2.5% year-over-year increase in April sales volume. Electric carmaker BYD edged 0.5% higher after reporting a 4.2% increase in total sales volume for April.

Biopharmaceutical company Beigene rose 2.7% after the company reported a more than doubling of its first-quarter revenue. The company said its net loss for the period widened as expenses rose.

Future Land Development Holdings climbed 3.4% following a 68.4% jump in April contracted sales. Longfor Group Holdings added 2.2% after the developer reported a 34.5% increase in contracted sales for April.

Casino operator Wynn Macau fell 0.7% following a 16% decline in March quarter net profit and a 2.3% drop in revenue for the period.

--Amy Lam

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