HONG KONG (Nikkei Markets) -- Hong Kong shares slid on Wednesday, in line with 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 dropped 1.3% to 26,062.56, its weakest close since Oct. 11, after briefly slipping below 26,000 earlier. Financial heavyweights HSBC Holdings and AIA Group declined 1.6% and 1.7%, respectively. Tencent Holdings retreated 0.7% amid broad market weakness, despite news the internet services major will introduce partner Nintendo's gaming console Switch in China on Dec. 10 at a suggested retail price of 2,099 yuan ($297).
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, 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.
The market "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 0.2%. Markets in the rest of the region also declined, with the Nikkei Asia300 Index sliding 0.7% by late afternoon.
Alibaba Group Holding lost 1.9% to HK$189 in Hong Kong, declining for a fourth straight day. The Chinese e-commerce major, which listed in the city last month after a blockbuster initial public offering, said the joint representatives for its initial public offering 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.
SIM Technology Group ended little changed. The mobile communications technology company said during Wednesday's midday market break that it expects to swing to a net loss in 2019 from a profit last year. The stock has dropped more than 16% so far this year, compared with little change for the Hang Seng Index during the same period.
Coking products maker China Risun Group fell 0.8% after saying it expects to report a "notable" decrease in net profit for 2019, compared with a year ago.
China Wood Optimization Holding jumped 14.3% after saying it plans to expand certain existing production facilities with a total investment of 180 million yuan ($25.5 million).
-- Benny Kung