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Nikkei Markets

Hong Kong stocks edge higher before Powell's testimony

Tencent and CNOOC biggest drivers of gains for the Hang Seng Index

HONG KONG (Nikkei Markets) -- Hong Kong stocks halted a five-day losing streak on Wednesday as investors awaited a U.S. Congressional testimony by the chairman of the Federal Reserve.

The Hang Seng Index closed 0.3% higher at 28,204.69. Social media major Tencent Holdings advanced 1.7% and energy producer CNOOC added 1.4% to rank among the day's biggest contributors to the gauge's gains by points. Online entertainment services company Maoyan Entertainment advanced 10.9% after announcing a strategic alliance with Tencent to improve their cooperation. Geely Automobile Holdings added 2.6% after tumbling on Tuesday in the wake of a profit warning.

Sunny Optical Technology Group advanced 1.7% after U.S. Commerce Secretary Wilbur Ross reportedly said the ban on American supplies to Chinese telecommunications major Huawei Technologies will be relaxed as long as national security is not at risk. Huawei is one of Sunny Optical's clients.

Fed Chairman Jerome Powell is scheduled to share his views with lawmakers later on Wednesday. The testimony is being closely watched by investors seeking more clues on his monetary policy outlook.

American and Chinese government officials involved in trade negotiations held a "constructive" discussion by phone on Tuesday, according to media reports. The call represents the first conversation between the two sides since U.S. President Donald Trump and Chinese President Xi Jinping agreed to resume talks at the Group of 20 nations summit in Japan last month. While Trump pushed for China to make large-scale purchases of U.S. agricultural products, Xi did not make any specific commitments, the South China Morning Post reported late on Tuesday.

The relaxation of the U.S. stance toward Huawei has aided mobile parts makers such as Sunny Optical and helped the Hang Seng Index halt its recent declines, said Ricky Huang, an analyst at Luk Fook Financial Services.

Still, the Hang Seng Index will "probably have a bit of a rebound today and resume weakness later," Huang said. A trade deal was unlikely to be reached by the end of this year as China is now "more reluctant to concede" in the discussions, he added.

In mainland China, the Shanghai Composite Index fell 0.4% while the yuan was little changed against the U.S. at 6.8806.

Shares of Ever Sunshine Lifestyle jumped 15.4% in Hong Kong after the property manager said it expects net profit for the six months ended Jun. 30 to have increased by more than 90% from a year earlier.

Zengame Technology jumped 12.6% after saying it expects a more than 30% increase in its first-half profit, helped by higher revenue from in-game advertising.

Camsing International Holding slumped 12.1% even as the company said in a stock exchange filing that there was no contract between the group and e-commerce major JD.com. The company said its clarification was in the wake of a media report which alleged that a contract between the two parties was fabricated.

Camsing said it was unaware of any reason for share price fluctuations, other than its announcement on Friday that its controlling shareholder and Chairperson Lo Ching was being held in custody in Shanghai. The stock has lost 87% of its value so far this week.

-- Amy Lam

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