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Nikkei Markets

Hong Kong stocks halt losing streak before Fed chief's testimony

Sunny Optical gains after US confirms export ban on client Huawei to be lifted

HONG KONG (Nikkei Markets) -- Hong Kong stocks headed for their first advance in six days on Wednesday, as investors awaited U.S. congressional testimony by the chairman of the Federal Reserve.

The Hang Seng Index added 0.3% to 28,205.41 by the midday break. Social media major Tencent Holdings advanced 1.2%, the biggest contributor to the gauge's gains by points, while pork producer WH Group gained 0.5%. Geely Automobile Holdings added 0.7% after tumbling on Tuesday in the wake of a profit warning.

Sunny Optical Technology Group advanced 3% 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 a client for Sunny Optical.

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 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.

The Hang Seng Index will "probably have a bit of a rebound today and resume weakness later," Huang said. Still, 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 was little changed by midday, while the yuan was also flat against the U.S. dollar at 6.8854.

Shares of Ever Sunshine Lifestyle jumped 16.9% in Hong Kong after the property manager said it expects net profit for the six months ending June 30 to have increased by more than 90% from a year earlier.

Zengame Technology jumped 13.8% 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 16.7% 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 reasons for share price fluctuations, other than its announcement on Friday that its controlling shareholder and chairperson, Lo Ching, was being held in criminal custody in Shanghai. The stock has lost 88% of its value so far this week.

-- Amy Lam

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