HONG KONG (Nikkei Markets) -- Hong Kong shares recouped early losses to end higher on Thursday following reports that the city's government was moving to ban face masks in an attempt to halt monthslong protests.
The Hang Seng Index ended 0.3% higher at 26,110.31 after falling as much as 0.9% earlier. China Mobile added 0.9%, and was the biggest contributor by points to Thursday's rebound. Insurers AIA Group and Ping An Insurance Group rose 0.3% and 0.6%, respectively.
Offshore oil producer CNOOC fell 1% to HK$11.74. Daiwa Capital Markets downgraded the stock to "hold" from "buy" and cut its target price to HK$12.50 from HK$14.70 after lowering earnings outlook to reflect lower oil price expectations. PetroChina slipped 0.3%. Brent crude prices declined 2% overnight, capping their 9th fall in 12 trading days.
The Hang Seng Index's late afternoon rebound came after media reports said the Hong Kong government is set to announce on Friday a ban on people wearing masks at protests. Officials are planning to impose the ban through legislation under the colonial-era Emergency Regulations Ordinance, the South China Morning Post reported, citing sources.
The reports follow monthslong anti-government protests triggered by a controversial extradition bill that have engulfed the city, marring business sentiment and hurting retail sales and property prices.
"At the moment the most important thing is to stop the violence first," said Steven Leung, executive director at UOB Kay Hian (Hong Kong). "Up to this moment, we haven't seen a solution to the social events." The anti-mask law might be a way to get out of this crisis, he added.
The protests, which typically take place on weekends and public holidays, thwarted tourist arrivals and curbed shopping, with latest data showing Hong Kong's retail sales plunged 23% in August.
Meanwhile, markets in the rest of Asia were lower after U.S. equity indexes fell for a second day on Wednesday amid worries over a slowdown in the world's largest economy. The ADP National Employment Report showed private employers added 135,000 jobs in September, lower than the 140,000 print that economists polled by Reuters were expecting. Data for August was revised downward. The numbers came on the heels of a weak factory activity reading.
Worries over a slowdown in U.S. economic growth amid a bruising trade war with China have prompted the Federal Reserve to lower rates twice this year. The U.S. central bank is expected to cut interest rates once again at its review later this month.
Still, investor focus remains on an upcoming round of trade talks, Leung said. Chinese Vice Premier Liu He is expected to lead a delegation to Washington next week for a round of high-level trade talks.
Chinese financial markets will be shut through Oct. 7 for the Golden Week holiday.
Property developer Jingrui Holdings slid 1.2% following a 6.6% decline in September contracted sales.
Watch and spectacles retailer Stelux Holdings International slid 5% after saying it expects to have swung to a consolidated net loss for the six months ended Sept. 30 from a profit in the year-ago period.
Cloud-computing-based marketing services company Weimob jumped 9.5% after saying it plans to buy back shares worth up to HK$100 million ($12.8 million) from time to time.
-- Sunny Ng