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Nikkei Markets

Hong Kong shares slip as caution prevails on trade and politics

Energy producers rise with oil prices, while profit warning hurts Bank of East Asia

HONG KONG (Nikkei Markets) -- Hong Kong shares headed lower on Friday as investors remained cautious over Sino-American trade relations and political unrest in the city.

The Hang Seng Index was down 0.5% to 27,153.63 by noon. Pan-Asia insurer AIA Group declined 1.2%, while internet services company Tencent Holdings shed 0.7% and London-headquartered lender HSBC Holdings slipped 0.5%. The three stocks contributed to about half the gauge's losses by points.

Energy producers PetroChina and CNOOC added 1.9% and 0.8%, respectively, after Brent crude prices climbed 2.2% overnight.

Investors this week remained focused on Sino-American trade relations as the date for a possible meeting between U.S. President Donald Trump and Chinese President Xi Jinping at a Group of 20 summit in Japan nears. In Hong Kong, protests against the enactment of a controversial extradition bill weighed on trading volumes on Wednesday and Thursday. Turnover on the main board was at 36.4 billion Hong Kong dollars ($4.65 billion) by noon on Friday, also lower than usual.

"As long as the protests do not cause disruption to business operations, people will not be too pessimistic on the local economic outlook," said Stanley Chan, director of research at Emperor Securities.

Meanwhile, investors are awaiting China's industrial production and retail sales reports for May, due later on Friday. In the mainland, the Shanghai Composite Index fell 0.3%.

Shares of Bank of East Asia slid 7.9% after the Hong Kong-based lender said it expects a material decrease in profit for the six months ending June 30, compared with HK$3.99 billion in the year-ago period. Citi lowered its price target on the stock to HK$20.40 from HK$23.60.

Air China advanced 1.8% after reporting a 6.7% increase in total passengers carried in May.

New Concepts Holdings declined 2.4%. The foundation-works company said it expects to report a narrower loss for the year ending March 31, compared with a year ago.

Hansoh Pharmaceutical Group jumped 25.9% to HK$17.96 in its trading debut in Hong Kong after the company raised HK$7.86 billion in gross proceeds from an initial public offering. The stock had opened for trading at HK$16.30, compared with its IPO price of HK$14.26.

Meanwhile, China Tobacco International added 4%, heading for a third consecutive advance. The stock has surged 60.7% since its market debut on Wednesday.

Hong Kong-based restaurant operator Tai Hing Group Holdings jumped 8.7% after falling 12% in its maiden trading session on Thursday.

"Newly listed stocks are seeing speculation because broader market sentiment is gloomy," Chan of Emperor Securities said.

Health and personal-care products retailer Ausupreme International Holdings added 5.1% after saying it expects profit for the year ending in March to have more than doubled from a year ago.

Marble stone seller Artgo Holdings jumped 8.7% to HK$1.12 after saying it agreed to buy Good Benefit Holdings, which holds four properties in Shanghai, for 212 million yuan ($30.6 million) through the issuance of 297.4 million new shares at HK$0.81 each.

-- Amy Lam

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