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Nikkei Markets

Hong Kong stocks fall for 6th day on trade and protest fears

Fosun Tourism slides as Thomas Cook Group goes into liquidation

The Hong Kong Exchanges and Clearing flag, left, flies in front of the company's headquarters in Hong Kong. (Photo by Ken Kobayashi)

HONG KONG (Nikkei Markets) -- Hong Kong stocks fell for a sixth straight day on Monday as worries over progress in the Sino-American trade talks and violent protests in the city dragged on investor sentiment.

The benchmark Hang Seng Index declined 0.8% to 26,222.40, its lowest closing level in almost three weeks. British lender HSBC Holdings gave up 0.8% and pan-Asia insurer AIA Group dropped 0.7%.

Hong Kong Exchanges & Clearing lost 1.9%. The market operator is working with UBS Group to convince London Stock Exchange Group investors on the merits of HKEX's takeover bid, Bloomberg reported on Sunday, citing people familiar with the matter. LSEG's board had earlier this month unanimously rejected HKEX's $37 billion stock-and-cash offer.

Light-rail operator MTR slid 1% following reports of vandalism that affected its station facilities and services over the weekend. The protests in Hong Kong have spilled over into a 16th consecutive week in the absence of signs that the government will accept activists' demands, including one for implementation of universal suffrage.

Concerns over a resolution of the U.S.-China trade conflict lingered after a visiting Chinese delegation of deputy-level officials on Friday unexpectedly canceled a visit to farms in Montana and Nebraska states. Senior officials from the two sides are scheduled to hold talks next month to resolve frictions. Meanwhile, U.S. President Donald Trump reportedly said he was in no hurry to strike a trade agreement and that he favored a comprehensive deal over an interim one.

Steven Wong, an investment analyst at wealth manager Harris Fraser, advised investors to reduce holdings as the Hong Kong market was on a downward trend.

He also noted market speculation about the possibility of further stimulus measures from Beijing as China's National Day holiday in October approached. "If true, we think this could support the market," Wong said, although he added that "we don't see it."

Meanwhile, the Shanghai Composite declined 1%, while the yuan traded onshore slid 0.5% to 7.1280 against the U.S. dollar.

Fosun Tourism Group sank 4.7% after British tour operator Thomas Cook Group entered liquidation following failed efforts to secure the financial backing for a proposed recapitalization and reorganization. Fosun group Chairman Guo Guangchang was the single biggest shareholder in Thomas Cook with an 18.07% interest as of April 25, according to Refinitiv data. Diversified conglomerate Fosun International, which controls Fosun Tourism, retreated 1.5%.

FDG Kinetic plunged 31.9%, FDG Electric Vehicles plummeted 29.3% and China Resources & Transportation Group skidded 10.5% after each said that the Li Ka Shing (Canada) Foundation had filed a bankruptcy petition against their Chairman Cao Zhong. All three companies said they haven't obtained sufficient information from Cao to analyze the impact and that they would make a further announcement as and when appropriate.

China Merchants Port Holdings gave up 1.3% after the company said it had decided against accepting an offer by Broadford to acquire all issued H-shares of Hong Kong-listed Dalian Port PDA at HK$1.0127 each. Shares of Dalian Port climbed 1% to HK$1.01.

China Kepei Education Group gained 0.8% after saying the total number of enrolled students at its schools in China during the current school year had risen 28.4% from a year earlier.

-- Benny Kung

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