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Nikkei Markets

Hong Kong shares edge up with G-20 summit in focus

Market activity weaker than usual in city with traders on sidelines

HONG KONG (Nikkei Markets) -- Hong Kong shares edged higher after a choppy trading day on Wednesday even as caution prevailed ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this week.

The Hang Seng Index edged 0.1% higher to 28,221.98 after changing direction at least seven times. Financial heavyweights Ping An Insurance Group and China Construction Bank rose 0.7% and 0.9%, respectively.

Trading in the rest of the region was mixed as investors await the outcome of a meeting between Trump and Xi at a Group of 20 summit in Osaka, Japan, that starts on Friday. The meeting comes more than a month after the two nations imposed a fresh round of trade tariffs on each other, following a four-month pause. The Nikkei Asia300 Index slipped 0.1%.

Washington is willing to suspend the next round of tariffs on an additional $300 billion of Chinese goods, and the decision may be announced after the two presidents meet, Bloomberg reported, citing people familiar with the plans.

Turnover on the Hong Kong Stock Exchange's main board was at 64.83 billion Hong Kong dollars ($8.30 billion) on Wednesday, lower than usual.

Investor participation is subdued ahead of the G-20 summit, said Will Leung, head of investment strategy for Hong Kong and greater China wealth management at Standard Chartered Bank.

"The gauge already rallied last week in anticipation of a good outcome from the meeting," he said. However, unless talks break down as they did in May, participants are prepared, Leung added.

U.S. equity indexes retreated on Tuesday after Federal Reserve Chairman Jerome Powell said the central bank was still monitoring the economy for signs of weakness and would look to avoid cutting benchmark interest rates as a knee-jerk reaction. Powell, who was speaking at the Council on Foreign Relations in New York, signaled that an interest-rate cut in July is not a done deal.

The odds of a rate cut in July are 100%, according to the CME Group's FedWatch tool.

Leung expects the Fed to "almost certainly" cut rates in July.

In the mainland, the Shanghai Composite Index slipped 0.2%, while the yuan traded onshore declined 0.1% against the dollar to 6.8829.

China Mobile edged 0.1% higher in Hong Kong after slipping 0.4% on Tuesday. The company plans to set up over 50,000 base stations and provide commercial services based on 5G mobile networks in more than 50 cities across the country this year, Chairman Yang Jie said on Tuesday.

Property developer and contractor Vantage International Holdings climbed 2.8% after reporting a 72% jump in profit for the year ended March 31.

China Education Group Holdings added 1.3% after saying its unit inked a deal to buy a college in Chongqing, China, for 1.01 billion yuan ($146.6 million).

Chinese pharmaceutical company 3SBio rose 2.7%. The company on Tuesday said the National Medical Products Administration issued a certificate of good manufacturing practices for pharmaceutical products in China for its kidney transplant-related medication Xenopax.

Kwoon Chung Bus Holdings advanced 5.5% even as the cross-border passenger transport services company reported a 7.9% decline in profit for the year ended in March amid higher financing costs. Revenue for the year rose 16.8%.

--Amy Lam

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