HONG KONG (Nikkei Markets) -- Hong Kong shares set course for a fourth day of gains on Wednesday as sentiment improved amid bets Sino-American trade talks in Beijing were progressing well.
The Hang Seng Index climbed 2.5% to 26,512.06 by noon. Financial and technology heavyweights AIA Group and Tencent Holdings rose 3% and 2.5%, respectively, contributing most to the gauge's gains by points.
Geely Automobile Holdings led percentage gains with an 8.8% advance, a day after it slid 11.3%. The rebound came amid broad gains for Chinese automakers in the city, after the National Development and Reform Commission's Chairman Ning Jizhe said China plans to introduce policies to boost domestic spending on autos and home appliances. He was speaking to state television CCTV.
Dongfeng Motor Group rose 2.9%, while BAIC Motor climbed 4.2% and Guangzhou Automobile Group jumped 8.8%. Great Wall Motor surged 12.1%. The carmaker on Tuesday reported a 6.5% increase in December sales volume.
Home-appliances maker Midea Group meanwhile jumped 5.8% in Shenzhen.
Optimism over a resolution to the trade spat between the U.S. and China helped to lift risk sentiment, with the Japanese yen, considered to be a safe haven, retreating 0.2% against the dollar. U.S. President Donald Trump tweeted on Tuesday that talks with China were going "very well." The meeting, initially scheduled to take place over two days through Tuesday in Beijing, spilled over into a third day, according to media reports.
"Trump's tweet last night is contributing to today's rally," said Ricky Huang, an analyst at Luk Fook Financial Services. Whether the extended talks signal "willingness to reach a deal, or problems and debate during the talks, I have no idea," he said.
Furthermore, the U.S. Federal Reserve's dovish tone, upbeat nonfarm payrolls data and advances by U.S. and Chinese equities were the "bigger reason" for the recent stock gains in Hong Kong, Huang added.
U.S. equities climbed for a third day on Tuesday, with the Dow Jones Industrial Average, S&P 500 Index and Nasdaq composite adding 1% or more.
In the mainland, the Shanghai Composite added 1.6%, while the yuan rose 0.2% to 6.8364 against the U.S. dollar.
Property developer CK Asset Holdings rose 3%. The company's Harbour Plaza Resort City hotel in Hong Kong submitted an application to be converted into a housing project with 5,000 flats, according to a document filed with town planning board.
Road King Infrastructure climbed 1.9% after reporting a 31% increase in property sales for the year ended Dec. 31.
Chinese smartphone maker Xiaomi shed 2.9%. The six-month lockup period for certain shareholders following the company's listing in July ended on Wednesday. Xiaomi on Wednesday said its controlling shareholders have undertaken to refrain from selling their shares in the company for another year.
Smartphone-components maker Q Technology (Group) climbed 5.2% after saying total sales volume for camera modules in December more than doubled from a year ago.
Chemical products company Kingboard Holdings advanced 1.7% after saying a unit agreed to acquire a company that owns some property assets in Hong Kong for HK$909.8 million ($116 million).
Plastic-products maker Tian Chang Group Holdings jumped 5.3% after forecasting an at least threefold jump in net profit for the year ended Dec. 31.
Sihuan Pharmaceutical Holdings Group surged 8.2% after saying its new diabetes drug Janagliflozin began Phase III clinical trials in China.
-- Amy Lam