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Nikkei Markets

Hong Kong shares fall on China data and political concerns

Bank of East Asia has worst day in more than decade after profit warning

HONG KONG (Nikkei Markets) -- Hong Kong shares fell on Friday as Chinese industrial output missed expectations and investors remained cautious over political unrest in the city.

The Hang Seng Index fell 0.7% to 27,118.35. Pan-Asia insurer AIA Group declined 1.7%, while internet services company Tencent Holdings shed 1.3% and London-headquartered lender HSBC Holdings slipped 0.8%. The three stocks contributed to more than half the gauge's losses in terms of points on Friday.

Energy producers PetroChina and China Petroleum & Chemical added 1% and 0.6%, respectively, after Brent crude prices climbed 2.2% overnight.

Despite Friday's decline, the city's benchmark gauge eked out a 0.6% advance this week. Investors have kept their focus on Sino-American trade relations as the date for a possible meeting between U.S. President Donald Trump and Chinese President Xi Jinping at a Group of 20 summit in Japan nears. In Hong Kong, protests against the enactment of a controversial extradition bill weighed on trading volumes on Wednesday and Thursday. Turnover on the main board was at 84.96 billion Hong Kong dollars ($10.86 billion) on Friday, also lower than usual.

"As long as the protests do not cause disruption to business operations, people will not be too pessimistic on the local economic outlook," said Stanley Chan, director of research at Emperor Securities.

Meanwhile, the Shanghai Composite Index declined 1% on the mainland after data showed China's industrial output rose 5% in May, a slower pace than expected. Economists polled by Reuters were expecting growth of 5.5%. Retail sales increased 8.6% last month, ahead of the 8.1% rate expected by economists.

Shares in Bank of East Asia slid 9.1%, its worst single-day drop since October 2008, after the Hong Kong-based lender said it expected a material decrease in profit for the six months ending June 30, compared with HK$3.99 billion in the year-ago period. Citi lowered its price target on the stock to HK$20.40 from HK$23.60.

Air China advanced 1.8% after reporting a 6.7% increase in total passengers carried in May.

New Concepts Holdings declined 4.8%. The foundation-works company said it expected to report a narrower loss for the year ending March 31, compared with a year ago.

Hansoh Pharmaceutical Group surged 37.3% to HK$19.58 in its trading debut in Hong Kong after the company raised HK$7.86 billion in gross proceeds from an initial public offering. The stock had opened for trading at HK$16.30, compared with its IPO price of HK$14.26.

Meanwhile, China Tobacco International jumped 8.9%, heading for a third consecutive daily advance. The stock has surged 60.7% since its market debut on Wednesday.

Hong Kong-based restaurant operator Tai Hing Group Holdings advanced 7.6% after falling 12% in its maiden trading session on Thursday.

"Newly listed stocks are seeing speculation because broader market sentiment is gloomy," Chan of Emperor Securities said.

Health and personal-care products retailer Ausupreme International Holdings added 5.1% after saying it expected profit for the year ending in March to have more than doubled from a year ago.

Marble stone seller Artgo Holdings rose 5.8% to HK$1.25 after saying it had agreed to buy Good Benefit Holdings, which holds four properties in Shanghai, for 212 million yuan ($30.6 million) through the issuance of 297.4 million new shares at HK$0.81 each.

-- Amy Lam

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