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Nikkei Markets

Hong Kong shares extend gains even as coronavirus cases rise

HKTV tumbles after announcing share placement at a sharp discount

HONG KONG (Nikkei Markets) -- Hong Kong shares set course for a second day higher on Wednesday, paced by gains for financial and technology heavyweights, although fears over the new coronavirus kept investors cautious.

The Hang Seng Index added 0.7% to 27,774.09 by noon. Among heavyweights, HSBC Holdings and AIA Group both gained 1%, while Tencent Holdings climbed 0.8%. Geely Automobile Holdings rose 2.4%, adding to its 5.7% advance on Tuesday, after the automaker said it was in preliminary talks with Sweden-based automaker Volvo Car AB to combine their businesses.

With Wednesday's advance, the Hang Seng Index is about 200 points shy of a full recovery from a 5.9% drop it suffered in the last week of January, when worries over the spread of the coronavirus escalated.

Broad market sentiment remained cautious, however, as the death toll from the outbreak rose by 97 to 1,113 as of Tuesday and confirmed cases rose to 44,653. Hong Kong had 49 confirmed cases of people infected with the virus as of Tuesday, and one fatality.

"People aren't buying in because the outbreak has stabilized or the worst is over," said Steven Leung, executive director at UOB Kay Hian (Hong Kong). "They are still worried about the economy."

As improving fundamentals were not the reason for the market's gains, there could be less momentum going forward, Leung added.

In the mainland, the Shanghai Composite Index edged 0.2% higher.

Hong Kong Television Network, or HKTV, slid 12.5% to HK$5.26 after the online shopping mall said it was selling 90 million shares to existing shareholders at HK$5.15 apiece.

Financial services company Differ Group Holding added 2.2% after saying a project owned 50% by the company won a bid for land use rights for a land parcel in China's Fujian Province for 390.7 million yuan ($56 million).

-- Benny Kung

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