HONG KONG (Nikkei Markets) -- Hong Kong shares set course for their biggest rally in more than a month on Friday, as optimism grew after a round of high-level Sino-American trade talks began on a positive note in Washington.
The Hang Seng Index added 2.2% to 26,271.36 by noon, tracking an advance on Wall Street overnight. Heavyweights HSBC Holdings and Tencent Holdings advanced 2.5% and 2.3%, respectively, while pan-Asia insurer AIA Group climbed 2%.
Geely Automobile Holdings declined 1.3% following a 9% drop in September sales. Drugmaker CSPC Pharmaceutical Group slid 7%, while Sino Biopharmaceutical slipped 0.9%. The three stocks were the only index constituents trading lower by the midday break.
U.S. equities advanced overnight after Chinese Vice Premier Liu He and a delegation of trade officials met with their U.S. counterparts on Thursday. U.S. President Donald Trump said talks were going "really well" and that he will meet Liu He on Friday.
"Sentiment has improved due to both international and local factors," said Linus Yip, chief strategist at First Shanghai Securities. "There is good news from the trade talks, with Trump planning to meet Liu He."
Also, "the situation in Hong Kong is apparently stabilizing, or at least not worsening," he added, referring to widespread protests that have gripped the city since June.
More anti-government demonstrations are expected to take place in Hong Kong over the weekend.
Hong Kong rail operator MTR added 2.9% after all its stations opened for the first time in nearly a week. However, trains will stop running at 10 p.m. on Friday, earlier than usual, for repairs following damage last weekend.
In the mainland, the Shanghai Composite Index added 0.4%, while the yuan traded onshore rose 0.2% against the dollar to 7.1003.
Smartphone components supplier Q Technology (Group) rose 2.8% after reporting a 52.5% surge in sales volume for camera modules in September.
Shares of Xinyuan Property Management Service (Cayman) jumped 79.8% to HK$3.74 in their trading debut after the Chinese property management company raised 260 million Hong Kong dollars ($33.1 million) in gross proceeds from an initial public offering.
CIFI Holdings climbed 7.2% following a 30% advance in September contracted sales.
Yuexiu Property advanced 1.7% after reporting a 69% surge in September contracted sales.
Hong Kong Television Network jumped 8.7% after reporting a 40.5% increase in September daily orders.
China Singyes Solar Technologies Holdings slumped 10% after the company said it swung to a loss of 468.03 million yuan ($65.73 million) for the first half of the year, compared with a profit of 228.48 million yuan a year ago.
-- Sunny Ng