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Nikkei Markets

Trade uncertainty weighs on Hong Kong shares

ZhongAn Online jumps after January-to-September premiums data

HONG KONG (Nikkei Markets) -- Hong Kong shares ended little changed after a choppy trading day on Tuesday, as uncertainty over Sino-American trade relations resurfaced after a report suggested Beijing wants more talks before committing to an agreement.

The Hang Seng Index had slipped less than 0.1% to 26,503.93 after changing direction at least 15 times. Heavyweights China Mobile and CNOOC lost 0.9% and 1.2%, respectively, while China Construction Bank added 0.6%.

CSPC Pharmaceutical Group edged 0.2% higher after saying it expects profit for the third quarter to have increased 15% to 35% from a year ago. Sino Biopharmaceutical rose 1.4% after saying an anti-thrombotic drug developed by its unit received provisional approval for an abbreviated new drug application from U.S. regulators.

All three major U.S. equity indexes slipped 0.1% overnight amid renewed worries over the resolution of trade tensions between the world's largest economies. China wants more negotiations as soon as the end of October to hammer out details of a "phase one" trade deal outlined by U.S. President Donald Trump before Chinese President Xi Jinping agrees to sign in, Bloomberg reported, citing people familiar with the matter.

The report came days after a round of high-level trade talks in Washington last week concluded with the U.S. deciding to hold off on increasing certain tariffs on Chinese goods, and with China committing to buy more American agricultural produce. The Hang Seng Index had risen 0.8% on Monday.

"A lot of positive expectations and factors are already reflected in the market," said Ronald Wan, chief executive at Partners Capital International. "Investors are tending to take a very short-term approach for the time being. They tend to be not so optimistic even though we heard something positive over the weekend."

At home, investors await Hong Kong Chief Executive Carrie Lam's policy address on Wednesday, her first since anti-government protests gripped the city. The protests, which started in June to oppose a controversial extradition bill, have turned into a pro-democracy movement. Lam on Tuesday said the address will focus on land and housing measures in what is widely considered the world's most expensive real estate market.

"How to increase the supply of land and maintain a healthy and stable property market" will be what investors are looking out for, Wan said. "We're not expecting anything dramatic, but we expect something concrete regarding the supply of land."

In the mainland, the Shanghai Composite Index declined 0.6%, while the yuan traded onshore edged 0.1% lower to 7.0715.

Data released Tuesday showed China's factory gate prices declined in September, with the producer price index slipping 1.2% year-on-year. While the print was in line with expectations, it was the steepest decline since July 2016, according to Reuters. Consumer price index rose 3%, accelerating faster than the 2.9% rate analysts were expecting.

ZhongAn Online P & C Insurance jumped 9% after reporting a 21.5% increase in gross written premium income for the January to September period.

Pacific Basin Shipping added 8.2% after the dry bulk shipping company reported a 3% and 7% year-over-year increase in third-quarter average daily time-charter equivalent earnings for its Handysize and Supramax vessels.

Future Land Development Holdings advanced 1.2% following an 18% increase in September contracted sales. Powerlong Real Estate Holdings slid 8.6% to HK$5.40 after the developer said it raised HK$792 million ($101 million) through a placement of 146.6 million shares at HK$5.40 apiece.

Angang Steel declined 0.7% after forecasting a near 75% slump in net profit for the January-to-September period.

--Suzannah Benjamin

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