HONG KONG (Nikkei Markets) -- Hong Kong shares edged higher on Friday after a choppy morning session, as investors awaited more details from a meeting in Washington this week between Chinese and U.S. officials on trade relations.
The Hang Seng Index was up 0.2% to 30,995.72 by the midday break after changing directions several times. Tencent Holdings rose 0.6%, extending its 3.7% rally on Thursday after it reported better-than-expected first-quarter results. PetroChina and CNOOC added 6.1% and 3%, respectively, as the benchmark Brent crude oil contract rose above $80 a barrel on Thursday for the first time since November 2014. China Petroleum & Chemical (Sinopec) climbed 3%. The three energy producers were the biggest contributors to the gauge's advance by points.
At its current level, the Hang Seng Index is down about 7.4% from the all-time high it reached in January, after recent Chinese-U.S. trade frictions have clouded investor sentiment. Markets are watching a second round of talks that are ongoing between officials from the two countries. China has offered the U.S. trade concessions and promises of increased purchases of American goods that will help trim the U.S. trade deficit by up to $200 billion a year, Reuters reported, citing U.S officials familiar with the proposal. This comes weeks after a similar meeting in Beijing concluded with no significant decisions announced on bilateral trade.
Jackson Wong, an analyst at Huarong International Securities, said the Hang Seng Index's recent retreats from highs show that retail investors are "racing to exit" and lack confidence in the market. "The Hong Kong stock market remains a sideways market," he said, adding that he expects the gauge to test support at 30,600 in the short-term.
The Shanghai Composite Index rose 0.3% in the mainland, while its Shenzhen counterpart slipped 0.4%.
The U.S. is taking a second look at penalties imposed on ZTE, White House economic adviser Larry Kudlow told Fox Business Network on Thursday. The comments come days after U.S. President Donald Trump said he was working with Chinese President Xi Jinping to give the company a "way to get back into business, fast."
Trading in the Chinese telecommunication-equipment maker's shares remains halted in Hong Kong and Shenzhen.
Melco International Development added 0.4% in Hong Kong after saying its U.S.-listed unit Melco Resorts & Entertainment had preliminary discussions with Premium Leisure for a potential deal whereby Premium Leisure could become an equity holder in Melco Resorts' casino unit in the Philippines.
Mason Group Holdings, which has diversified business interests, rose 1.1% after saying strategic investors including Tencent-backed online health-care services company WeDoctor will take a 35.2% stake in a unit.
Shares of fabric-maker Wang Tai Holdings jumped 22.6% to 12.5 Hong Kong cents after saying it plans to place up to 310 million shares, or 20% of existing share capital of company at 10 Hong Kong cents apiece.
Winfair Investment Company rose 1.5%. The company, engaged in securities trading and property development, said it expects nearly a sixfold jump in profit for the year ended March.
Apparel-maker Texwinca Holdings declined 1.5% after saying it expects to report a 40% dip in profit after tax for the year ended March.
-- Amy Lam