HONG KONG (Nikkei Markets) -- Hong Kong shares headed lower on Wednesday following a selloff on Wall Street, as investors grew concerned about the outcome of U.S.-China trade negotiations and the American economy.
The Hang Seng Index was down 1.5% to 26,840.05 by noon. Insurer AIA Group fell 3.1%, contributing most to the gauge's losses by points, after rising over the last two days. Internet heavyweight Tencent Holdings dropped 2.4%, also poised for its first retreat in three days.
The three major U.S. equity indexes fell 3% or more overnight amid renewed concerns over Sino-American trade relations. U.S. President Donald Trump said on Twitter that negotiations with China on trade had already started, but if a deal with does not take place, he reiterated that he is a "Tariff Man." The comments came days after Washington agreed to hold off on raising tariffs on $200 billion of Chinese goods following a meeting between Trump and Chinese President Xi Jinping at a G-20 summit.
China's Ministry of Commerce said on its website that the Xi-Trump meeting was "very successful" and that Beijing will begin to implement measures on which the two nations reached an agreement as soon as possible.
The extent of decline for Hong Kong stocks was "less than expected," said Felix Man, executive director at Future Land Resources Capital Group.
The U.S. emphasis on the 90-day deadline has "reignited some pessimism in the market. Chances of a good deal are not that high because of the Chinese New Year holidays" in the first week of February, he said.
Falling yields on long-dated U.S. bonds raised concerns over growth in the world's largest economy, also weighing on sentiment. The yield on 10-year U.S. Treasury notes fell 6.8 basis points on Tuesday, its sixth consecutive day lower. U.S. markets will be closed on Wednesday as the nation mourns former President George H.W. Bush, who died on Friday.
In the mainland, the Shanghai Composite Index edged 0.2% lower, while the yuan traded onshore weakened 0.4% to 6.8644 against the dollar. A private survey released on Wednesday showed activity in China's services sector accelerated at a faster-than-expected pace last month. The country's services Purchasing Managers' Index for November came in at 53.8, higher than the 50.8 reading a month ago.
Chinese carmaker BAIC Motor slumped 9.3% in Hong Kong. Germany's Daimler AG has expressed an interest in increasing its holdings in a joint venture with BAIC to at least 65% from 49%, Bloomberg reported, citing people familiar with the discussions.
Mining company Tongguan Gold Group jumped 26.1% after saying a unit signed an agreement to acquire Max Paramount and Best Income, which hold exploration and mining licenses for gold mines, for HK$300 million ($34.4 million).
Mainland property developer China Evergrande Group edged 0.4% higher despite reporting a 29.1% decline in November contracted sales.
Rival China Vanke added 1.5% after saying contracted sales for last month jumped 67.8% from a year ago.
Shimao Property Holdings declined 1.3%. The developer on Tuesday reported an 89% surge in November contracted sales.
China Aoyuan Group rose 0.8% following a 47% jump in November contracted sales.
Liquid crystal display products maker Truly International Holdings fell 1.6% after reporting a 1.3% increase in net consolidated turnover for November. That was slower than October's 34% year-on-year increase in turnover.
HMV Digital China Group plunged 15% on the Hong Kong stock exchange's growth enterprise market board, after saying its retail business may undergo plans that include possible restructuring, liquidation and disposal. The stock has slumped nearly 90% this week.
-- Amy Lam and Carrie Chen