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Nikkei Markets

Trade war and protest worries weigh on Hong Kong stocks

Bankruptcy petitions filed by Li Ka Shing Foundation knock FDG shares

HONG KONG (Nikkei Markets) -- Hong Kong stocks were on course for a sixth straight day of declines on Monday as worries over progress in the Sino-American trade talks and violent protests in the city dragged on investor sentiment.

The benchmark Hang Seng Index declined 0.9% to 26,207.26 by noon, on course for its lowest level in almost three weeks. Pan-Asia insurer AIA Group dropped 1.2%, while Ping An Insurance Group declined 1.5%.

Hong Kong Exchanges & Clearing lost 1.1%. The market operator is working with UBS Group to convince London Stock Exchange Group investors on the merits of HKEX's takeover bid, Bloomberg reported on Sunday, citing people familiar with the matter. LSEG's board had earlier this month unanimously rejected HKEX's $37 billion stock-and-cash offer.

Light-rail operator MTR slid 1.4% following reports of vandalism that affected its station facilities and services over the weekend. The protests in Hong Kong have spilled over into a 16th consecutive week in the absence of signs that the government will accept activists' demands, including one for implementation of universal suffrage.

Concerns over a resolution of the U.S.-China trade conflict lingered after a visiting Chinese delegation of deputy-level officials on Friday unexpectedly canceled a visit to farms in Montana and Nebraska states. Senior officials from the two sides are scheduled to hold talks next month to resolve frictions. Meanwhile, U.S. President Donald Trump reportedly said he was in no hurry to strike a trade agreement and that he favored a comprehensive deal over an interim one.

Steven Wong, an investment analyst at wealth manager Harris Fraser, advised investors to reduce holdings as the Hong Kong market was on a downward trend.

He also noted market speculation about the possibility of further stimulus measures from Beijing as China's National Day holiday in October approached. "If true, we think this could support the market," Wong said, although he added that "we don't see it."

Meanwhile, the Shanghai Composite declined 1.3%, while the yuan traded onshore slid 0.3% to 7.1124 against the U.S. dollar.

China Mobile advanced 0.8% in Hong Kong. The mobile services giant and telecommunications-equipment maker Huawei Technologies on Monday each denied a report by Brazilian media O Globo that they were exploring a partnership to acquire Oi.

FDG Kinetic plunged 24.6% and FDG Electric Vehicles plummeted 18.7% after each said that the Li Ka Shing (Canada) Foundation had filed a bankruptcy petition against their Chairman Cao Zhong. The two companies said they haven't obtained sufficient information from Cao to analyze the impact and that they would make a further announcement as and when appropriate.

China Merchants Port Holdings gave up 1.1% after the company said it had decided against accepting an offer by Broadford to acquire all issued H-shares of Hong Kong-listed Dalian Port PDA at HK$1.0127 each. Shares of Dalian Port were unchanged at HK$1.00.

China Kepei Education Group gained 1.3% after saying the total number of enrolled students at its schools in China during the current school year had risen 28.4% from a year earlier.

-- Benny Kung

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