HONG KONG (Nikkei Markets) -- Shares in Hong Kong wavered along the previous day's close in the morning session on Tuesday as worries grew that the full impact from an intensifying trade war between the U.S. and China had yet to be felt.
The Hang Seng Index was little changed at 26,606.92 after changing direction a few times. The gauge flirted with a technical bear market, as it did on Monday, and slid as low as 26,447.26 during the session. A close below 26,523.30 would mark a more than 20% decline from a record high in January for the 50-member index.
Casino operators tumbled, with Galaxy Entertainment Group sliding 5.1% and Sands China losing 3.1%. Analysts at Bernstein wrote in a note their channel checks indicated that gross gaming revenue for the industry was below their expectation in early September. Tencent Holdings fell 1%. The social-media and gaming company on Monday said it will be shutting down its Everyday Texas Hold'Em poker game, amid tighter regulations for online games.
Apple supplier AAC Technologies Holdings declined 1.8%, heading for its lowest close since February 2017. U.S. President Donald Trump on Saturday tweeted that the iPhone maker should make its products in the U.S. if it wanted to avoid tariffs on imports from China.
The city's main gauge has been under pressure in recent months in the face of an escalating trade war between the U.S. and China as well as the yuan's weakness. The two nations have already imposed two rounds of import tariffs on each other, and Trump has signaled America's readiness to levy duties on a further $200 billion of Chinese exports. He has also warned that an additional $267 billion of goods from the mainland could be subjected to tariffs.
"Recent declines show the market lacks confidence" as the U.S.-China trade war and the yuan's depreciation cloud sentiment, said Eric Yuen, chief research analyst at Mason Securities. "The Hang Seng Index is likely to continue its soft declines as long as these two factors show no improvement."
It is hard to say the worst is over as "the tariffs will in the long run force more companies to relocate production capacity away from China, hurting the Chinese economy" and jobs, Yuen said.
In the mainland, the Shanghai Composite added 0.3%, while the yuan traded onshore slipped 0.1% against the U.S. dollar to 6.8638, on course for a fourth day lower.
China Southern Airlines declined 1.9% amid weak market sentiment. The airline on Monday said it carried 14.4% more passengers in August than it did in the same month a year ago.
Greenland Hong Kong Holdings slid 0.8%, although the developer on Monday reported an 88% jump in contracted sales for August.
CNT Group jumped 15.5% as trading in the stock resumed after a halt on Monday. The paint products maker said a unit will sell certain property assets in Hong Kong to Jetco (H.K.) for HK$900 million, and at the same time buy a hotel asset from Jetco for HK$530 million.
Footwear and handbags retailer Le Saunda Holdings declined 3.7% after saying it expects to record a net loss for half-year ended Aug. 31, compared with a profit a year earlier.
China Huarong Asset Management slid 0.7%, poised for a record low, after the state-owned company said it has decided to withdraw its application for an A-share offering.
-- Amy Lam