HONG KONG (Nikkei Markets) -- Hong Kong shares recouped some early losses to end Wednesday's morning session little changed, with heavyweight Tencent Holdings swinging between gains and losses ahead of its quarterly earnings.
Social-media and gaming company Tencent was up 0.4% by noon in Hong Kong ahead of its third-quarter earnings report due after markets close on Wednesday. The stock, which had opened higher, dropped as much as 1.5% earlier before recovering amid caution over the performance of its gaming business. The Hang Seng Index was down 0.1% at 25,758.06 after falling as much as 0.6% earlier.
"The market is bearish on Tencent's quarterly results," said Stanley Chik, head of research at Bright Smart Securities. "Its gaming business, dragged down by policy, has cast a shadow on the company's prospects. The management view over its business development should give some hints as to the stock's outlook."
CNOOC, China Petroleum & Chemical (Sinopec) and PetroChina declined 4.7%, 3.3% and 3.2%, respectively, after U.S. crude prices slid 7.1% on Tuesday amid oversupply concerns. They were among the top losers on the Hang Seng China Enterprises Index, which was down 0.5%. Going in the opposite direction, Cathay Pacific Airways rose 3.9%, while Air China and China Southern Airlines added 4.2% and 5.4%, respectively.
The Hang Seng Index has been resilient despite weak cues from Wall Street as investors await developments on bilateral trade between the U.S. and China. The Dow Jones Industrial Average and the S&P 500 declined overnight, while the Nasdaq Composite ended unchanged.
"Hong Kong shares now have a higher correlation with the A-share market rather than with the U.S. market," Chik said. The outlook for local equities is "highly dependent" on A-share markets, he added.
Chik said if trading activity in the A-share market remains around levels seen on Tuesday, there could be a further improvement in China's equity markets. Turnover at the Shanghai and Shenzhen bourses totaled 455.6 billion yuan ($65.43 billion) on Tuesday, up from 393.8 billion yuan on Monday, according to Xinhua.
The Shanghai Composite was little changed on Wednesday, while its Shenzhen counterpart rose 0.3%. The gauges are up 2% or more for the week so far.
FIT Hon Teng, a unit of Taiwan's Hon Hai Precision Industry, slipped 1.4%. The company on Tuesday said its profit from continuing operations for the quarter ended Sept. 30 came in at $73.9 million, while revenue was $1.08 billion. Mobile handset maker FIH Mobile, another affiliate, rose 1.3% in Hong Kong despite saying its loss from continuing operations for the July to September period widened and revenue fell 4% from a year ago.
TPV Technology, which makes televisions and monitors for personal computers, jumped 26.2% after reporting a profit of $12.33 million for the third quarter, compared in a loss of $19.61 million in the year-ago period.
Footwear company Yue Yuen Industrial (Holdings) fell 0.9% after reporting a 48.3% decline in net profit for the January to September period. Knitted sweater maker GTI Holdings declined 3.6% after saying its unit agreed to buy all of Jiu Zhou Financial Group and a loan for HK$101 million ($12.9 million).
Ausnutria Dairy climbed 2.4% after saying net profit for the nine months ended Sept. 30 more than doubled from a year ago and revenue jumped 38.6% from a year ago.
In Construction Holdings surged 17% after saying its unit secured construction contracts worth more than HK$500 million for foundation works in the past few months.
-- Carrie Chen