HONG KONG (Nikkei Markets) -- Hong Kong stocks on Friday headed for a third day of gains on hopes for a rate cut by the U.S. Federal Reserve, although caution over progress in Sino-American trade talks kept investors cautious.
The benchmark Hang Seng Index added 0.5% to 28,574.46. State-owned China Life Insurance led advancing stocks in percentage terms as it added 1.8% while pan-Asia insurer AIA Group drove the gauge's increase by points, climbing 1.4%. Geely Automobile Holdings gave up 1.7% amid concerns over its profit outlook. Nearly HK$34 billion ($4.4 billion) in stocks changed hands on the main board.
The Dow Jones industrials and the S&P 500 Index reached record highs overnight after Fed Chairman Jerome Powell this week signaled a reduction in borrowing costs was imminent.
Investors have been keeping an eye on fresh developments related to trade tensions between the U.S. and China amid growing concern that the dispute could take time to resolve. U.S. President Donald Trump on Thursday said on Twitter that "China is letting us down" by not buying U.S. farm products.
"Investors are very cautious" and likely to reduce positions when the Hang Seng Index climbs above 29,000, said Castor Pang, head of research at Core Pacific Yamaichi International, citing lack of progress in trade talks between the two countries. "Even though the U.S. stock market reached a record high last night, it hasn't translated into a big rally for the Hong Kong stock market" as fund inflows have been "little," he added.
In mainland China, the Shanghai Composite climbed 0.5%, while the yuan was little changed at 6.8712 to a U.S. dollar.
Anta Sports Products rose 1% after the Chinese sportswear company said the percentage increase in its second-quarter retail sales from a year earlier was in the "midteens."
Cosmetics retailer Sa Sa International slipped 1.3% after its retail and wholesale turnover for the April-June quarter fell 10.8% from a year ago. The company said "social issues" that started in the second week of June -- a reference to mass protests in the city against the local government's extradition bill -- and the effect of a higher sales base a year ago weighed on its sales performance.
Fosun Tourism Group lost 1.2%, after the Fosun International unit said that London-listed Thomas Cook Group, in which it has a minority interest, has proposed a recapitalization and breakup exercise that would give Fosun Tourism a controlling stake in Thomas Cook's tour operating business. Thomas Cook is targeting an injection of 750 million pounds ($939.6 million) of new money, which may comprise a capital injection and new financing facilities.
Chaowei Power Holdings gained 1.9% after the Chinese battery maker said it expects first-half net profit to show a "substantial" increase, aided by lower costs.
CMBC Capital jumped 7.2% to HK$0.208. The China Minsheng Bank's financial services unit expects its January-June net profit to rise by at least 35%, as compared with year-ago net profit of HK$100.4 million.
-- Amy Lam