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Nikkei Markets

Hong Kong shares eke out small gains after slump on protests

Tencent climbs ahead of results, while developers deepen losses

HONG KONG (Nikkei Markets) -- Hong Kong shares edged higher on Tuesday, recovering slightly from a selloff the previous day that was triggered by flaring political tensions in the Asian financial hub.

The Hang Seng Index was up less than 0.1% at 26,947.66 by noon after changing directions at least twice. Social media and gaming company Tencent Holdings added 1.2% ahead of its third-quarter earnings release on Wednesday.

Property developers extended losses. Swire Pacific and Wharf Real Estate Investment Company fell 0.9% and 1.5%, respectively, after the stocks shed between 4% and 5% on Monday.

The city's main equity gauge slid 2.6% on Monday, suffering its worst single-day drop in about three months, as political unrest in the city intensified after the police shot at least one protester during demonstrations. Later, police fired tear gas in the city's Central business district as protests continued into lunch hour. A video shared widely on social media showed what looked like a protestor setting a man on fire following an argument. Monday's escalation followed a weekend of unrest after the death of a student protester on Friday following a fall during clashes.

"Yesterday's drop was quite overdone. It is a surprise to see such a weak rebound today," said Ivan Li, investment research department director at CSL Securities. He said the drop was a confluence of factors, also triggered by updates about trade talks and profit-taking after recent gains.

Still, odds for deeper losses at current levels are not big, he added.

The drop on Monday followed a recent rally that lifted the index to three-month highs and caused a measure of momentum to signal the gauge was overbought. The index's 14-day Relative Strength Index, which climbed over the 70 level last week, was at 50.3.

Meanwhile, investors are also on edge over signs of uncertainty in Sino-American trade talks. Last week, China said both sides had agreed to roll back tariffs imposed on goods imported from each other. U.S. President Donald Trump on Friday described reports about how much the U.S. was willing to roll back tariffs as incorrect.

Investors are awaiting more clarity on when Beijing and Washington will sign phase one of a trade agreement, an imminent move flagged by both nations in recent days.

In the mainland, the Shanghai Composite Index slipped 0.4% by midday on Tuesday.

Jinchuan Group International Resources fell 1.6% in Hong Kong after the minerals and metals miner said it expects to record a "substantial decrease" in net profit for the full year ending December due to a $25 million legal settlement.

China Longyuan Power slipped 0.7% after reporting a 0.8% decline in October power generation.

China Financial Leasing Group jumped 9.6% after saying its unit entered a memorandum of strategic cooperation with Youbank Foundation related to investments in digital assets. Financial terms were not disclosed.

Vtech Holdings surged 10.4% after the electronics products maker reported a 31% increase in net profit for the six months ended Sept. 30.

Property developer Greenland Hong Kong Holdings added 1.8% following a 37.7% jump in contracted sales for October.

-- Benny Kung

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