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Nikkei Markets

Hong Kong stock index tops 31,000 as AIA and Tencent gain

Swire Properties poised for record high on potential sale of towers; Q Tech tumbles

HONG KONG (Nikkei Markets) -- Hong Kong stocks headed higher for a fifth day on Friday, as extended gains on Wall Street and anticipation over heavyweight Tencent Holdings' earnings boosted risk appetite.

The Hang Seng Index had gained 1.4% to 31,227.84 by the noon break, poised for a close above the 31,000-point level for the first time since late March. Insurer AIA Group rose 2.9% and was the top contributor to the index's gains by points, amid expectations for its growth outlook in China. Social-media and gaming major Tencent, which is due to report earnings next week, added 1.5%.

Diversified conglomerate Swire Pacific advanced 2.7%. Shares of its unit Swire Properties jumped 5.2% and were on course for a record high after the developer on Thursday said it is in discussions that may result in the sale of two office towers in Hong Kong.

The Dow Jones Industrial Average climbed for a sixth straight day on Thursday, setting the stage for gains in the local market as well as the Asia-Pacific region. Several technology companies advanced, fueling a 0.9% gain for the Nasdaq Composite Index. The Nikkei Asia300 Index of regional stocks outside Japan was up 1.1%.

Stanley Chik, head of research at Bright Smart Securities in Hong Kong, said the strong performance of Chinese technology companies in U.S. trading overnight, as well as hopes surrounding Tencent earnings, were pushing the Hang Seng Index higher.

Still, "the main board turnover has not been increasing lately, showing that investors are still cautious," Chik said. "Low investor participation could limit the room for further gains."

Apple suppliers AAC Technologies Holdings and Sunny Optical Technology Group added 3.5% and 0.8%, respectively, building on their recent solid gains.

Q Technology Group was a notable decliner on Friday, tumbling more than 26% after the company warned that its profit before tax for the six months ending June 30 is expected to decline by 50% or more from a year ago.

Hua Hong Semiconductor fell 3.9%, trimming this week's gains to 4%. The company on Thursday said it expects first-quarter profit to rise 18.1% year-over-year to $40.2 million, and said revenue for the second quarter was projected to increase by 5% to 7%.

In mainland China, the Shanghai Composite Index slipped less than 0.1%, while the yuan traded onshore was flat at 6.3436 against the U.S. dollar.

-- Amy Lam

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