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Nikkei Markets

Hong Kong shares flat amid protest, trade uncertainty

Oil prices lift producers while China and Unicom up on 5G sharing plans

HONG KONG (Nikkei Markets) -- Hong Kong shares ended flat for a second day on Tuesday as uncertainty over political unrest in the city and Sino-American trade relations kept investors on the sidelines.

The Hang Seng Index ended 0.01% higher at 26,683.68 after rising as high as 26,871 earlier. Energy producers CNOOC and China Petroleum & Chemical, or Sinopec, rose 1.2% and 2.1%, respectively, after global oil prices increased overnight amid hopes for production cuts by major oil-producing nations. London-headquartered lender HSBC Holdings rose 1.2%.

China Unicom (Hong Kong) jumped 5% and China Telecom advanced 4.7% after the two telecommunications companies agreed to share the expensive financial burden of rolling out fifth-generation telecom networks in Asia's largest economy. Their larger rival China Mobile climbed 0.3%.

Sunny Optical Technology Group declined 2.5%, trimming gains so far this month to 5.4%. The smartphone components maker had on Monday reported a 46.5% jump in August shipment volume for handset lenses and a 22.3% increase in shipment volumes for handset camera modules.

The Hang Seng Index has traded in a narrow 261-point range this week after a 3.8% jump last week, which followed the Hong Kong government's withdrawal of a controversial extradition bill. Large-scale demonstrations turned violent at times over the weekend despite the withdrawal of a controversial extradition bill by the government, as the activists' other demands, including an independent commission to investigate police actions during the protests, remain unmet.

Chinese and American officials plan to meet in Washington next month as part of efforts to resolve trade frictions that have weighed on markets and several global economic indicators. Investors are also awaiting the European Central Bank's meeting on Thursday and the U.S. Federal Reserve's policy review next week to gauge the road map for global monetary easing.

Most positive news has already been baked into share prices, said Ronald Wan, chief executive at Partners Capital International. "We are still seeing some volatility in the market, given the uncertainty over Hong Kong and trade talks," he said.

In the mainland, the Shanghai Composite Index slipped 0.1%. The yuan traded onshore rose 0.2% against the U.S. dollar to 7.1048.

Data released earlier on Tuesday showed China's Producer Price Index dropped 0.8% in August from a year earlier -- the sharpest contraction in three years, according to Reuters.

Great Wall Motor advanced 1.9% in Hong Kong after the automaker late on Monday reported a 9.5% increase in sales volume for August. Guangzhou Automobile Group rose 1.5% despite reporting a 6.8% decline in August sales.

China Longyuan Power Group added 2% following a 9.2% increase in August power generation.

Kong Sun Holdings added 2% after reporting a 3.7% increase in electricity volume generated by its solar power plans during the January-to-August period.

-- Benny Kung

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