HONG KONG (Nikkei Markets) -- Hong Kong shares headed for a second consecutive day higher on Tuesday amid lingering relief over the suspension of a controversial extradition bill in the city, while markets awaited a U.S. central bank policy review this week.
The Hang Seng Index had added 0.7% to 27,427.26 points by noon. Financial heavyweights AIA Group and China Construction Bank rose 1.5% and 0.9%, respectively, while social media major Tencent Holdings rose 1.4%. The three stocks contributed to about half of the gauge's gains by points.
The U.S. Federal Reserve's two-day policy review starts later on Tuesday, with investors awaiting further indications that a rate cut this year may be a possibility. Fed Chairman Jerome Powell had indicated earlier this month that the central bank would act to sustain economic growth while global trade tensions continue. Still, the central bank is widely expected to stand pat at this week's meeting, with only about 20% of futures traders pricing in a rate cut, according to CME's FedWatch tool.
The Hang Seng Index was among the region's top performers for a second day after the Hong Kong government on Saturday suspended a bill that, if enacted, would allow for the extradition of criminal suspects from the city to other jurisdictions, including mainland China. Still, turnover on the exchange's main board remained lower than usual at 37.04 billion Hong Kong dollars ($4.73 billion) by the midday break.
There are hopes that the bill "will not be raised again this year," said Ricky Huang, an analyst at Luk Fook Financial Services. The low turnover signals that "market sentiment remains cautious," he added.
Hong Kong-based property developers headed for a second day higher on Tuesday, with Wharf Real Estate Investment Company rising 0.8% and New World Development climbing 1.5%. Sun Hung Kai Properties advanced 1.7%.
Still, despite short-term relief, people are less likely to favor local property developers in the wake of "rising political instability," Huang said.
An estimated 2 million protesters took to Hong Kong's streets on Sunday demanding the bill's complete withdrawal and Hong Kong Chief Executive Carrie Lam's resignation. Smaller scale demonstrations continued into the week.
In the mainland, the Shanghai Composite Index rose 0.1%, while the yuan traded onshore was little changed against the U.S. dollar at 6.9263.
French beauty products retailer L'Occitane International jumped 7.5% to HK$14.84 after reporting a 22.7% increase in profit for the full year ending in March that beat expectations. Citi Research, which has a "buy" rating on the stock, raised its target price to HK$18.40 from HK$16.40, while Daiwa Capital Markets upgraded it to a "buy" from "outperform."
Extrawell Pharmaceutical Holdings surged 36.2% after saying it expects profit for the year ending March 31 to have increased from a year ago.
Industrial components maker Trio Industrial Electronics Group rose 18.9% following a forecast for a 40% to 70% year-on-year increase in profit for the first half of the year.
Xinyi Solar Holdings slid 11.1% to HK$3.67 after the company's controlling shareholder, Hong Kong-listed Xinyi Glass Holdings, and Xinyi Group Glass agreed to sell 314 million shares, or a 3.90% stake in company, at HK$3.75 each. Xinyi Glass Holdings added 1.8%.
BeiGene slipped 1.4% after the Chinese biotechnology company said it is ending Celgene's exclusive license to develop and sell BeiGene's tumor treatment outside of Asia ahead of the U.S. company's acquisition by BristolMyers Squibb. Celgene will pay BeiGene $150 million as part of the agreement
-- Amy Lam