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Nikkei Markets

Hong Kong shares rise following advances on Wall Street

Ping An jumps on first-half earnings, while Ausnutria rebounds after halt

HONG KONG (Nikkei Markets) -- Hong Kong shares recouped early losses and headed higher by midday on Friday, helped by gains for insurance companies following a modest rebound on Wall Street overnight.

The Hang Seng Index added 0.8% to 25,700.43 by noon after opening lower. Ping An Insurance Group climbed 3% after reporting a 68.1% jump in net profit and a 17.2% increase in revenue during the first half of 2019. Meanwhile, pan-Asia insurer AIA Group rose 0.8%. The two stocks contributed about a third of the index's gains by points.

The Dow Jones Industrial Average and S&P 500 both ended higher overnight, recovering slightly from Wednesday's slide that was triggered by fears of an impending recession. The Nasdaq composite slipped marginally. The yield on 10-year U.S. Treasury bonds this week fell below that of two-year notes for the first time since 2007. While the inversion, seen as signaling an upcoming recession, was brief, the yield on 10-year Treasury bonds fell further on Thursday, as investors continued to favor the safety of long-term U.S. debt.

Meanwhile, Beijing on Thursday vowed to retaliate against Washington's impending 10% tariffs on $300 billion of Chinese goods, calling the move a violation of accords between the two countries at a Group of 20 summit in Japan in June. Earlier this month, U.S. President Donald Trump unexpectedly announced plans to impose tariffs on more Chinese goods from September. The U.S. Trade Representative office has since said some of those goods will be spared from levies until Dec. 15.

China's State Council Tariff Committee on Thursday said the nation has "no choice but to take necessary measures to retaliate," according to Bloomberg.

Even so, market reaction to the possible escalation in trade tensions was muted.

"The Hang Seng Index has bottomed out," said Ivan Li, a director in CSL Securities' investment research department. "The gauge is at a very cheap valuation."

While investors are not optimistic about the trade war, they are not as worried as they used to be, he added.

In the mainland, the Shanghai Composite Index added 0.7% by midday on Friday, while the yuan slipped 0.1% against the dollar to 7.0387.

Chinese brewer Tsingtao Brewery jumped 11.5% after reporting a 25% increase in profit and 9% higher revenue for the first half.

Infant formula maker Ausnutria Dairy surged 15.3% as trading resumed following a day's halt, after the Chinese company "vigorously" denied allegations of financial irregularities made by short-seller Blue Orca Capital on Thursday. The stock had slumped 20% Thursday before trading was halted.

China Southern Airlines added 2.7% after reporting a 10.4% increase in passengers carried in July.

Air China rose 1.5% after saying passengers carried in July rose 6.9% from a year ago.

Casino operator Wynn Macau added 4% despite reporting a 7.1% decrease in net profit for the first half of the year. The stock is down 4.8% for the year.

Handbag maker Best Food Holding tumbled 10% after saying it expects to report a "significant increase" in net loss for the first half of the year.

-- Benny Kung

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