HONG KONG (Nikkei Markets) -- Hong Kong shares jumped to an eight-month high on Monday, buoyed by Chinese financial heavyweights, as investors cheered the imminent signing of the first phase of a Sino-American trade deal.
The Hang Seng Index added 1.1% to 28,954.94, its highest close since May 2019. China Construction Bank and Ping An Insurance Group advanced 1.2% and 2.6%, respectively. Internet services heavyweight Tencent Holdings rose 2% to HK$406.40, its highest close since June 2018.
Market focus has been on the formalization of the first phase of a U.S.-China trade deal, due to take place on Wednesday in Washington. The deal marks a rollback of some U.S. tariffs on Chinese goods, a halt in further punitive trade tariffs and a Chinese pledge to buy more American agricultural produce. More details could become available once the pact is signed. U.S. President Donald Trump has said that he will travel to Beijing later to discuss the next phase of negotiations.
"Even though we are still not sure about the exact details of the trade deal, people basically believe that details have been confirmed," said Kingston Lin, managing director for asset management at Canfield Securities.
He expects more volatility for the Hang Seng Index when the second round of trade negotiations begins.
Equities on Wall Street retreated on Friday after data showed U.S. nonfarm payrolls rose 145,000 in December, lower than the 164,000 increase analysts polled by Reuters were expecting. The U.S. Federal Reserve, which cut rates three times last year before signaling a pause, is scheduled to review policy when it meets on Jan. 28 and 29.
On the mainland, the Shanghai Composite gained 0.8%, while the yuan traded onshore jumped 0.4% against the dollar to 6.8899.
Chow Tai Fook Jewellery Group rose 3.6% in Hong Kong after reporting a 2% increase in third-quarter same-store sales for mainland China. The company said same-store sales for Hong Kong and Macao declined 35% during the quarter.
Electric-vehicle maker BYD surged 15.9% after Miao Yu, China's minister of industry and information technology, said over the weekend that the government would not implement a significant cut this year to subsidies for new energy vehicles.
Geely Automobile Holding added 2.1%. The carmaker has held talks as it considers injecting cash into London-listed luxury carmaker Aston Martin, the Financial Times reported on Friday, citing four people familiar with the discussions. A spokesperson for Geely declined to comment.
Personal care and tissue products maker Vinda International Holdings climbed 5% after saying it expects profit for 2019 to have risen by more than 70% from a year earlier.
Freeman FinTech added 0.1% in an upbeat broad market, erasing early losses. The company on Friday said it expected the operating environment to remain challenging for the remainder of its financial year ending in March. It reported a net loss of 1.59 billion Hong Kong dollars ($204.7 million) for the six months ended Sept. 30, narrowing from HK$1.76 billion a year earlier.
Forward Fashion (International) Holdings tumbled 27% to HK$1.46 as the fashion apparel retailer made its trading debut in the city after raising HK$200 million in gross proceeds from an initial public offering.
-- Benny Kung