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Nikkei Markets

Hong Kong shares set course for fresh five-month highs

Bank of Guizhou slips on trading debut, while Powerlong Commercial rises

HONG KONG (Nikkei Markets) -- Hong Kong shares climbed further from a five-month high on Monday as optimism over monetary support in China and Sino-American trade relations supported sentiment.

The Hang Seng Index added 0.6% to 28,403.75 by noon after falling as low as 28,165.13 in the early minutes of trading. Financial heavyweights AIA Group and HSBC Holdings added 1.6% and 0.4%, respectively, accounting for more than a fourth of the index's gains by points.

Turnover on the local stock exchange's main board was 38.42 billion Hong Kong dollars ($4.93 billion) by the midday break. Hong Kong's stock market will close at noon on Tuesday and will be shut on Wednesday for New Year's Day.

The Hang Seng Index, which has risen 7.1% over the last four weeks, is at five-month highs, as trade tensions between the world's largest economies de-escalated. Markets are looking forward to the signing of the first phase of a U.S.-China trade deal that was agreed on by both sides earlier this month. The preliminary agreement, which follows 18 months of escalating trade tensions between the two nations, involves the rollback of some U.S. tariffs on Chinese goods and a pledge by Beijing to buy more American agricultural produce.

"I don't think it will be difficult for the market to sustain the current climb," said Alvin Ngan, an analyst at Zhongtai International Securities. He added, however, that a further upside for the Hang Seng Index in 2020 will likely be limited to about 7%.

Meanwhile, expectations for monetary support from Chinese authorities have also gathered pace as Asia's largest economy grapples with a slowdown. The People's Bank of China on Saturday said commercial banks should replace old benchmark lending rates with the Loan Prime Rate to price loans issued before Jan. 1, 2020.

In the mainland, the Shanghai Composite Index climbed 0.9%, while the yuan traded onshore jumped 0.2% against the dollar to 6.9824.

Powerlong Commercial Management Holdings advanced 4.9% to HK$9.97 in its maiden trading session in Hong Kong. Powerlong Commercial Management is a spin off from Hong Kong-listed Powerlong Real Estate Holdings. Powerlong Real Estate Holdings added 0.4%.

Bank of Guizhou, also making its debut in the city on Monday, slipped 2% to HK$2.43. The lender had raised HK$5.46 billion in gross proceeds from an initial public offering.

Mobi Development jumped 13.3% after the maker of wireless communication antennas and base station radio frequency subsystems said its unit won a 70% share in Chinese telecommunication equipment maker ZTE's 5G antenna project procurement bid. ZTE shares were up 0.7% in Hong Kong.

C-Mer Eye Care Holdings rose 3.7% after the ophthalmic services provider said it acquired land use rights in Shenzhen for 209 million yuan ($29.9 million).

Food retail chain Best Mart 360 Holdings added 6.5% after saying it has set up an entity called Shenzhen Best Mart 360 Commerce to expand its retail business in China.

-- Benny Kung

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