HONG KONG (Nikkei Markets) -- Hong Kong shares slid on Wednesday, tracking broad losses in the region, after U.S. President Donald Trump fueled doubts over the likelihood of a preliminary Sino-American trade deal in the near term.
The Hang Seng Index fell 1.2% to 26,077.77 by noon after briefly slipping below 26,000 earlier. The gauge was on course to close at its lowest level since Oct. 10. Financial heavyweights HSBC Holdings and AIA Group declined 1.4% and 1.7%, respectively.
U.S. equities extended losses overnight after Trump signaled he was in no hurry to strike a trade deal with China. "In some ways, I think it's better to wait until after the election," Trump reportedly said on Tuesday, referring to the 2020 U.S. Presidential election.
His remarks come at a time when markets are hoping the two countries can sign a preliminary trade agreement before a Dec. 15 deadline for new U.S. tariffs on Chinese goods. Separately, U.S. Commerce Secretary Wilbur Ross said a round of tariffs on Chinese imports, including cellphones and laptops, would take effect on Dec. 15 if no substantial progress was made.
"This morning's drop hasn't yet factored in the worst-case scenario," said Banny Lam, head of research at CEB International, adding that the trade atmosphere was getting worse. "Things are looking rather negative."
Meanwhile, the U.S. House of Representatives on Tuesday approved a bill that requires the Trump administration to toughen its response to China's alleged crackdown on its Muslim minority, including imposing sanctions on senior mainland officials.
China's Foreign Ministry on Wednesday called the bill a malicious attack against the country.
In the mainland, the Shanghai Composite Index slipped 0.3%. Markets in the rest of the region also declined, with the Nikkei Asia300 Index sliding 0.9%.
Alibaba Group Holding lost 1.5% to HK$189.70 in Hong Kong, heading for a fourth day lower. The Chinese e-commerce major, which listed in the city last month after a blockbuster initial public offering, said the joint representatives for its IPO had fully exercised an overallotment option for 75 million shares or 15% of the total offer shares.
Alibaba raised an additional 13.2 billion Hong Kong dollars ($1.7 billion) via the overallotment, bringing total IPO gross proceeds to HK$101.2 billion.
Coking products maker China Risun Group fell 2% after saying it expects to report a "notable" decrease in net profit for 2019, compared with a year ago.
China Wood Optimization Holding jumped 7.1% after saying it plans to expand certain existing production facilities with a total investment of 180 million yuan ($25.5 million).