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Nikkei Markets

Hong Kong shares rise as Sino-American trade tensions ease

Hang Seng Index trims intraday gains as heavyweight Tencent retreats

HONG KONG (Nikkei Markets) -- Hong Kong shares rose on Monday, as fears of an imminent trade war eased after the U.S. and China said they will hold off on imposing import tariffs on each other.

The Hang Seng Index closed 0.6% higher at 31,234.35 after rising as high as 31,464.10 intraday. Apple suppliers AAC Technologies Holdings and Sunny Optical Technology Group rose 4.7% and 1.2%, respectively, while China Merchants Port Holdings added 3.3%. Tencent Holdings ended 0.7% lower, retreating from a 1.7% advance earlier.

Pork producer WH Group, which owns U.S.-based Smithfield Foods, jumped 4.9% to lead percentage gains on the gauge. The stock had shed 13% between early March and Friday amid concerns that China's proposed tariffs on U.S. imports would hurt Smithfield. Markets in Hong Kong will be closed Tuesday for a local holiday.

Risk appetite improved after U.S. Treasury Secretary Steven Mnuchin on Sunday said the nation's trade war with China is on hold. The comments came after Chinese and U.S. officials met in Washington last week to discuss a way forward for bilateral trade following weeks of tensions between the two countries. Beijing and Washington have said they will continue discussing measures to help the U.S. narrow its trade deficit with China.

Still, some market participants remained on the fence about the developments.

"Mnuchin has said this is only a temporary halt of import tariffs, and U.S.-China trade conflicts are more than just a trade deficit issue," said Daniel So, strategist at CMB International Securities. "There are still many topics in need of bilateral negotiations, and they continue to pose uncertainties to the financial markets."

The Shanghai Composite Index advanced 0.7%, while the Hang Seng China Enterprises Index of large mainland companies listed in Hong Kong ended little changed after rising as much as 1.2% intraday.

Tencent-backed online publishing company China Literature fell 2.9% in Hong Kong after saying on Friday that it will make joint investments of up to 220 million yuan ($34.5 million) with Xinli Group for production and distribution of films and television series.

Flue gas treatment services provider China Boqi Environmental jumped 4% after saying it expects to distribute 30%-50% of its net profit for the current year as dividend. The company's stock made its debut in Hong Kong in March.

Shanghai Pharmaceuticals Holding lost 1.3% after saying it will take control of Techpool Bio-Pharma with a transaction that will increase its stake in the company to 67.14% from 40.80%. As part of the deal, Shanghai Pharmaceuticals (HK), a unit, has agreed to pay $144 million to buy the entire equity interest of Takeda Chromo Beteiligungs, which holds 26.34% in Techpool, from Takeda Pharmaceuticals International, headquartered in Zurich, Switzerland, and wholly owned by Takeda of Japan.

Sany Heavy Equipment International Holdings added 2% after reporting a 140% jump in net profit for the March quarter and a 97% surge in revenue.

Eprint Group rose 1.4%. On Friday, the printing services provider said it expects to report a 30% to 40% increase in net profit for the year ended March.

Luxury goods seller Dickson Concepts International climbed 5.3% after saying it expects to record a "solid" increase in profit for the year ended March.

IN Construction Holdings tumbled 6.7%. The company on Friday said it expects to report a "notable" decrease in its consolidated net profit for the year ended March.

--Amy Lam

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