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Nikkei Markets

Hong Kong shares cling to nine-month high with Fed watched

China Telecom climbs after 2018 results, while Hengan slips

HONG KONG (Nikkei Markets) -- Hong Kong shares ended a choppy day slightly higher on Tuesday, even as investors awaited the U.S. Federal Reserve's policy review and more details on progress in Sino-American trade talks.

The Hang Seng Index had edged 0.2% higher to 29,466.28 points, closing at its highest since June 20 for a second day. Pork producer WH Group advanced 5.5%, building on Monday's 5.4% advance after reporting 2018 results. CSPC Pharmaceutical Group also extended Monday's earnings-driven rally, rising 3.3%.

Personal hygiene products maker Hengan International Group Company declined 2.3% after reporting a marginal increase in 2018 profit from a year ago. Net profit for the year ended Dec. 31 stood at 3.80 billion yuan ($565.84 million) compared with 3.79 billion yuan a year ago.

The U.S. Federal Reserve's two-day policy review starts in Washington later Tuesday. While the central bank is widely expected to stand pat on interest rates at the meeting, markets are awaiting its economic forecasts and plans for adjustments to its balance sheet. U.S. equities extended recent gains overnight. Investors also continue to watch trade developments between the U.S. and China.

"It is unlikely that the U.S. and China will reach a trade deal in April. It may be delayed to May," said Ricky Huang, an analyst at Luk Fook Financial Services, adding that a possible meeting between Presidents Donald Trump and Xi Jinping will likely only take place in June. "But this is not causing too much concern as A-shares and U.S. shares are holding up quite well."

In the mainland, the Shanghai Composite Index slipped 0.2% on Tuesday after climbing 3.5% over the past two trading days.

Huang added that the Chinese economy will likely benefit from positive fiscal stimulus this year.

Meanwhile, markets are also watching developments surrounding Britain's exit from the European Union as the scheduled March 29 departure approached without a deal in sight. The Japanese yen, considered a safe-haven asset, climbed 0.2% against the dollar.

China Telecom added 1.6% in Hong Kong after the state-owned telecommunication company reported a 13.9% rise in net profit in 2018.

Wuxi Biologics (Cayman) rose 2.9% following a 73.6% surge in 2018 adjust profit and a 56.6% jump in revenue.

China Literature, backed by Tencent Holdings, jumped 8.3% following a 63.7% surge in 2018 profit and a 23% increase in revenue. Tencent shares edged 0.3% higher.

Guotai Junan International Holdings declined 3.5% after reporting a 35.1% drop in 2018 net profit and a 3.8% decrease in revenue.

Angang Steel rose 1.6% following a 19.8% increase in 2018 net profit.

CSC Financial dipped 2.2% after saying net profit for 2018 declined 23.1% from a year ago.

Plastic-mold products maker Haitian International Holdings fell 3.6% following a 4.4% decrease in full-year profit.

Printed circuits maker AKM Industrial declined 3.3% after reporting a 12% decrease in profit for 2018.

-- Amy Lam

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