HONG KONG (Nikkei Markets) -- Hong Kong stocks retreated from their highest level in almost three weeks on Wednesday, bogged down by uncertainty over trade talks between the U.S. and China, and cautious trade ahead of the Federal Reserve's policy review.
The Hang Seng Index ended the day 0.3% lower at 30,723.88, after a 1.7% jump on Monday sent the 50-stock gauge to its highest level since April 12. Financial stocks were the main contributors to the index's losses by points, with China Construction Bank losing 1.1% and Bank of China shedding 1.4%. Life insurer AIA Group also gave up 1.4%.
Standard Chartered fell 1.9%. The U.K.-headquartered bank, which has a large presence in Asia, reported a 20% year-on-year growth in statutory profit for the quarter ended March 31 during the midday break on Wednesday. The lender had posted a loss for the three months to Dec. 31.
The Nikkei Asia300 Index edged 0.3% lower as caution prevailed in Asia before U.S. Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and Trade Representative Robert Lighthizer arrive in Beijing on Thursday to hold talks on bilateral trade.
Markets also are awaiting the Fed's statement at the conclusion of its two-day policy review later on Wednesday. While the central bank is widely expected to stand pat at this week's meeting, investors are awaiting clues about further interest-rate increases.
"For the time being, we will still see a lot of uncertainty and the first half of May will be a bit weaker," said Daniel So, strategist at CMB International Securities. "Even though the two countries will negotiate this week, which could alleviate some worries in the market, I do not think they will come to an end soon."
He expects the Hang Seng Index to consolidate around the 30,000 level before rising above 31,000 by the end of May.
On the mainland, the Shanghai Composite Index and its Shenzhen counterpart both ended little changed as markets reopened after a four-day weekend. The yuan traded onshore weakened 0.4% to 6.3595 against the U.S. dollar.
Factory activity in China accelerated last month, according to Caixin/Markit's manufacturing purchasing managers' index. The PMI rose to 51.1 in April from 51 in March. A figure above 50 indicates greater activity.
Sands China and Galaxy Entertainment Group gained 2.7% and 2.2%, respectively, in Hong Kong after data showed Macau gaming revenue rose 27.6% in April from a year earlier.
Sunny Optical Technology Group jumped 4.9% after Apple, to which it supplies components, reported better-than-expected March quarter earnings and forecast stronger-than-estimated revenue for the June quarter.
Asia Cement China Holdings jumped 6.9% after the cement-and-concrete maker on Monday said it swung to a profit of 307.6 million yuan ($48.5 million) in the March quarter following a loss a year earlier. Its revenue increased 45.6%.
China Aoyuan Property Group advanced 3.9% after saying contracted sales for April nearly tripled from a year earlier to 7.21 billion yuan.
China Yuhua Education rose 5.9%. Late on Monday, the private-education service provider reported a 65.4% surge in net profit for the six months ended Feb. 28 and a 22.7% increase in revenue.
Automated Systems Holdings surged 22% after the information technology company said a unit entered into a memorandum of understanding with Alibaba Cloud (Singapore) for strategic cooperation to market Alibaba Cloud services in Hong Kong and Macau. Alibaba Cloud is a unit of Alibaba Group Holding.
-- Benny Kung