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Nikkei Markets

Hong Kong shares little changed amid investor caution

Xiaomi drops after profit slumps and revenue misses expectations

HONG KONG (Nikkei Markets) -- Hong Kong shares were little changed by noon on Wednesday, as investors remain cautious amid worries over global growth and political uncertainty in parts of Asia and Europe.

The Hang Seng Index had added 0.1% to 26,260.52 by noon after trading in a narrow 200-point range. Social media and gaming major Tencent Holdings climbed 0.6% while China Construction Bank rose 1.1%. Mainland drugmakers Sino Biopharmaceutical and CSPC Pharmaceutical Group rose 6.1% each.

Bourse operator Hong Kong Exchanges & Clearing edged 0.3% higher. U.S.-listed Chinese e-commerce major Alibaba Group Holding is postponing its Hong Kong listing amid protests in the city, Reuters reported, citing sources.

Among decliners, Hong Kong & China Gas fell 5.2% after reporting an 18.8% decline in profit for the first half of the year.

Wednesday's choppy morning trading session followed declines for all three major U.S. equity bench marks on Tuesday. Investors await minutes of the U.S. Federal Reserve's latest meeting, due later Wednesday. On Friday, Fed Chairman Jerome Powell is expected to speak at the central bank's annual Jackson Hole symposium.

Meanwhile, protests in Hong Kong remain a drag on sentiment as they show few signs of abating. Activists are demanding that the government withdraw its controversial extradition bill, conduct an independent investigation into the police's use of force during the demonstrations and implement universal suffrage.

Globally, investors are watching for more details on Sino-American trade spat. They are also worried about political turmoil in Britain as it prepares to leave the European Union, and the prospect of elections in Italy after Prime Minister Giuseppe Conte resigned on Tuesday.

The Hang Seng Index has been consolidating these last few days, said Conita Hung, investment strategy director at Tiger Faith Asset Management. "I'm inclined to be bearish these days because of the situation in Hong Kong, and as the trade talks look like they will only get prolonged."

In the mainland, the Shanghai Composite Index was flat by midday. The yuan traded onshore added 0.1% against the dollar to 7.0503.

Chinese smartphone maker Xiaomi fell 5.3% in Hong Kong after reporting April-to-June quarter results. The Beijing-based company on Tuesday reported an 87% slump in second-quarter profit. Revenue for the period rose 14.8% to 51.95 billion yuan ($7.36 billion). Analysts were expecting revenue of 53.52 billion yuan, according to Refinitiv data.

Chinese online and mobile game developer Kingsoft sank 8% to HK$14 ($1.79) after saying it swung to a loss of 1.42 billion yuan in the April-to-June quarter, compared with a profit of 100.95 million a year ago. Nomura kept its "reduce" rating on the stock, but cut its price target to HK$13.80 from HK$16.20.

United Company Rusal rose 1.3% after saying results from PJSC MMC Norilsk Nickel may positively impact its first-half results. Rusal, which has an investment in the Russian nickel and palladium mining company, was unable to obtain the latter's financial information earlier. The Russian aluminum producer said it will make a further announcement on updated interim financial results that were reported last week.

Haidilao International Holding, a Chinese hot-pot restaurant chain, jumped 7.7% after reporting a 40.9% increase in first-half profit and a 59.3% surge in revenue.

--Benny Kung

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