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Nikkei Markets

Mainland Chinese companies steer Hong Kong shares higher

Rusal jumps after US extends deadline for Americans to end dealings with company

HONG KONG (Nikkei Markets) -- Hong Kong shares were poised to closer higher for the first time in three days on Tuesday, with mainland Chinese financial heavyweights listed in the city pacing gains, while technology stocks advanced after recent losses.

The Hang Seng Index was up 1.1% to 30,578.79 by the noon lunchbreak. Industrial & Commercial Bank of China (ICBC), China Construction Bank (CCB) and Ping An Insurance Group rose 2.5%, 2.1% and 1.7%, respectively. Pork producer WH Group advanced 3.2% ahead of its first-quarter earnings report, due later on Tuesday.

Apple-supplier Sunny Optical Technology Group climbed 1.5% after shedding 12.1% in a two-day selloff amid worries about a slowdown in smartphone demand. AAC Technologies Holdings, which also supplies parts to the iPhone maker, snapped a nine-day losing streak to rise 1%. Tencent Holdings, the most valuable company listed in Hong Kong, also added 1%.

Tuesday's equity moves extend the choppy trading pattern on display in recent weeks. The Hang Seng Index is on course for a monthly gain in April, although it has declined in four of the past five weeks. Trade tensions between the U.S. and China continue to cloud investor sentiment even as verbal exchanges between the two nations have eased.

"The Hang Seng Index is still in a consolidation stage and is following A-share indexes tightly," said Andy Wong, chief investment strategist at Harris Fraser (International). "A-share indexes have been weak due to onshore liquidity shortage before the Labor Day holidays."

Wong expects Chinese equities to resume strength after next week's holidays.

Southbound trading, through links connecting the Hong Kong market with mainland stock exchanges, will be closed from April 26 through May 1.

Anhui Conch Cement rose 4.7% ahead of its March quarter results, pacing gains on the Hang Seng China Enterprises Index. All but three of the gauge's 50 constituents were higher by noon as it rose 1.9%. In the mainland, the Shanghai Composite Index jumped 2.1% to set course for its biggest single-day advance since February.

Russian aluminum producer United Company Rusal surged 31.6% after the U.S. on Monday extended its deadline by which American customers need to wind down their businesses with the company to Oct. 23 from an earlier cutoff date of June 5. The U.S. Treasury Department also said it would consider lifting sanctions on the company if Russian tycoon Oleg Deripaska sold his stake in Rusal.

BAIC Motor added 5.2% after the Chinese automaker posted a 17.5% year-on-year increase in net profit for the quarter ending in March to 1.6 billion yuan ($253.6 million). Total operating income for the period rose 9.3% to 39.81 billion yuan.

Great Wall Motor, which is due to report March quarter earnings on Tuesday, added 1.6%.

China Railway Construction advanced 1% after reporting a 7% increase in the value of newly signed contracts for the March quarter to 279.9 billion yuan.

Datang International Power Generation rose 2.1% ahead of its quarterly results, due later on Tuesday. Late Monday, the company reported a 10.2% increase in total power generation for the first quarter.

-- Amy Lam

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