HONG KONG (Nikkei Markets) -- Hong Kong shares headed lower for a fifth straight day on Tuesday, weighed down by concerns that new listings were soaking up market liquidity and expectations for a smaller interest-rate cut in the U.S.
The benchmark Hang Seng Index lost 0.8% by midday to 28,106.22. Geely Automobile Holdings fell 5.3%, leading decliners in percentage terms, after the Chinese carmaker said it expects first-half net profit to fall about 40% from a year earlier. Pork producer WH Group and mobile phone parts maker AAC Technologies Holdings each shed 3.2%.
Initial public offerings currently under way in Hong Kong and mainland China have been absorbing the available liquidity in the market or even leading some to sell shares to raise money for subscriptions, market participants have said.
Budweiser Brewing Company APAC, the regional arm of Anheuser-Busch InBev, is currently taking subscriptions for its $9.8 billion IPO in the city. The offer will be open until noon on Thursday. At the same time, more than 20 companies are expected to list their shares on a new Nasdaq-style board in Shanghai later this month.
In addition to tightened market liquidity, dimmed expectations for a rate cut of as much as 50 basis points by the U.S. Federal Reserve, and uncertainty over the U.S.-China trade conflict, also contributed to the market weakness, according to Kenny Wen, a wealth management strategist at Everbright Sun Hung Kai.
While American and Chinese negotiators are set to speak this week to revive stalled trade talks, previous disagreements between the two sides "threaten to bog down discussions," The Wall Street Journal reported on Monday.
In the mainland, the Shanghai Composite Index fell 0.6% to 2,916.78, extending its 2.6% tumble on Monday.
Tian Chang Group was among the notable movers in Hong Kong, soaring 51.7% after saying it expects its net profit for the six months ending June 30 to have jumped at least 14 times from a year ago, driven by increased production capacity and higher new product sales.
Huanxi Media Group gained 5.5% after saying it expects to have swung to a profit in the six months ending June 30 from a loss a year earlier.
Kingboard Holdings dropped 7.3% after the laminates manufacturer said it expects a 60% to 65% fall in reported net profit for the half year ending June 30.
Chinese yarn and fabric manufacturer Weiqiao Textile lost 3.2% after saying it anticipates a "significant decrease" in operating results for the first half.
China Maple Leaf Educational Systems dropped 2.3% to HK$2.98. Citigroup cut its target price for the private school operator to HK$2.80 from HK$3.30, citing tightening regulation.
-- Amy Lam