HONG KONG (Nikkei Markets) -- Hong Kong shares rose to a three-month high on Friday, spurred by hopes for a Sino-American trade deal and gains for Chinese equities listed in the city after better-than-expected mainland factory activity data.
The Hang Seng Index rose 0.7% to 27,100.76 on Friday, its highest close since Aug. 1. Heavyweight insurers AIA Group and Ping An Insurance Group rose 1.3% and 1.1%, respectively, contributing about a third of the index's gains by points.
The gauge rose 1.6% during the week amid lingering hopes for a preliminary Sino-American trade deal, with strong indications that the two nations will sign a partial agreement this month. U.S. President Donald Trump on Thursday said on Twitter that Washington and Beijing were working to find a new site to sign phase one of a trade deal. The Asia-Pacific Economic Cooperation forum in Chile, where the two sides were earlier expected to sign the pact, was canceled.
"The overall situation on U.S.-China trade is not too bad," said Hoyin Yiu, managing director for asset management at CASH Financial Services Group. "People have already factored in all the negative factors that surfaced."
The Hang Seng China Enterprises Index of large mainland companies listed in Hong Kong rose 0.9%. On the mainland, the Shanghai Composite Index climbed 1% after a private survey showed manufacturing activity in Asia's largest economy expanded more than expected. The Caixin/Markit manufacturing Purchasing Managers' Index came in at 51.7 for October, higher than the 51 reading analysts polled by Reuters were anticipating.
Meanwhile, data released on Thursday showed Hong Kong slid into a recession in the third quarter. The city's gross domestic product shrank 3.2% in the July-to-September period from the preceding three months, contracting for a second consecutive quarter.
Biotechnology company BeiGene surged 31.9% in Hong Kong to a record high of HK$110 after U.S.-listed drug company Amgen said it would buy a 20.5% stake in BeiGene for $2.7 billion.
Shares of ESR Cayman rose 5.4% to HK$17.70 on their trading debut in the city after the property developer raised HK$12.62 billion ($1.61 billion) in gross proceeds in its second attempt at an initial public offering in the city.
Beauty services provider Perfect Shape Medical jumped 19.7% after saying it expected operating profit for the six months ended Sept. 30 to have "substantially" increased from a year ago.
China National Building Material added 4.1% following a 36% year-on-year increase in January-to-September net profit and a 16.8% rise in revenue.
WuXi Biologics Cayman slid 6.5% to HK$86.45 after the company announced a placement of 46.5 million new shares at HK$85 each. The company said its controlling shareholder Biologics Holdings had also agreed to sell 46.5 million existing shares at the same price.
-- Benny Kung