HONG KONG (Nikkei Markets) -- Hong Kong shares headed higher on Tuesday, led by gains for mainland companies listed in the city after China's manufacturing sector unexpectedly expanded this month.
The Hang Seng Index added 1.1% to 23,428.15 by noon. Among heavyweights, AIA Group jumped 3.9%, contributing most to the index's gains by points. Sino Biopharmaceutical slid 5.8% after the Chinese drugmaker reported a 70% plunge in 2019 net profit.
Tuesday's gains came after all three major U.S. equity indexes advanced overnight. Meanwhile, sentiment in Asia improved after an official survey showed China's factory activity unexpectedly expanded in March, with the manufacturing Purchasing Managers' Index coming in at 52 for this month after plunging to a record low of 35.7 in February. A reading above 50 signals expansion. Analysts polled by Reuters were expecting a reading of 45.
The Hang Seng China Enterprises Index, a gauge of large mainland companies listed in Hong Kong, added 1.1%. In the mainland, the Shanghai Composite Index rose 0.4%, while the yuan traded onshore added 0.2% to 7.0855 against the dollar.
Still, the Hang Seng Index is down 16.9% in the January-to-March quarter so far, on course for its worst quarter since 2015 as the fast-spreading coronavirus rips through the globe. Concerns remain as China continues to contend with the pandemic, which originated in the central city of Wuhan late last year. While instances of new infections in the mainland appear to have slowed, the outbreak continues to spread fast in other parts of the world.
"The biggest variable remains the epidemic in Europe and the U.S. This is the one factor I am most concerned about," said Stanley Chik, head of research at Bright Smart Securities. "Outlook for the Hong Kong market remains uncertain and not clear. People will need to be patient."
Outdoor advertising company Clear Media jumped 35.5% after saying Ever Harmonic Global has offered to take the company private for 3.86 billion Hong Kong dollars ($497.8 million).
Gemdale Properties jumped 11.9% following a 68.9% jump in full-year net profit and a 65% surge in revenue.
Agricultural Bank of China (ABC) added 1.7% after reporting a 4.6% increase in 2019 net profit.
China Railway Group climbed 5.1% following a 37.7% surge in full-year profit and a 14.9% increase in revenue.
Shimao Property advanced 6.7% after reporting a 23% increase in 2019 net profit and a 30% jump in revenue.
China Railway Construction added 3% following a 9.7% increase in 2019 net profit and a 13.7% rise in revenue.
Joy City Property fell 3.3% after reporting a 22% decline in 2019 net profit.
-- Benny Kung