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Nikkei Markets

Upbeat factory data lift Chinese companies on Hong Kong market

Galaxy Entertainment and Sands China climb despite fall in Macao gaming turnover

HONG KONG (Nikkei Markets) -- Hong Kong shares headed higher Monday, paced by gains for Chinese companies listed in the city, after two separate surveys showed manufacturing activity in Asia's largest economy expanded last month.

The Hang Seng Index added 0.5% to 26,468.62 by noon. Insurers AIA Group and Ping An Insurance Group advanced 0.8% and 1.2%, respectively, contributing most to the gauge's gains by points.

Galaxy Entertainment Group added 1.5%, while Sands China rose 1.2%. The gains came even as Macau's gross gaming revenue fell 8.5% from a year earlier in November.

The Hang Seng China Enterprises Index of large mainland companies listed in the city jumped 0.8%.

Data released on Saturday showed China's factory activity unexpectedly expanded in November. The official manufacturing Purchasing Managers' Index rose to 50.2 for last month from 49.3 in October.

Analysts polled by Reuters were expecting a reading of 49.5. A reading above 50 signals expansion. Meanwhile, a private survey released on Monday also showed manufacturing activity grew last month. The Caixin/Markit PMI rose to 51.8 in November from 51.7 in October.

However, some market participants were not convinced the advance had much momentum. Turnover on the exchange's main board was at 34.29 billion Hong Kong dollars ($4.38 billion) by noon, lower than usual for the time of day.

"We are having a sort of a mini-rebound" after the China PMI data and Macao gaming revenue numbers, said Kevin Leung, executive director of investment strategy at Haitong International Securities. There is no change to fundamentals, "with no updates on trade talks and Hong Kong the way it is," he added. He was referring to social unrest in Hong Kong after months of anti-government protests.

Police and protesters clashed over the weekend after a brief pause recently. Meanwhile, investors are awaiting further information on the phase one of a trade agreement between the U.S. and China.

In the mainland, the Shanghai Composite Index climbed 0.4%, while its Shenzhen counterpart rose 0.5%. Trading in Gree Electric Appliances shares was halted in Shenzhen after the company said its controlling shareholder is signing an equity transfer agreement with Zhuhai Mingjun Investment, a fund backed by private equity firm Hillhouse Capital.

China Aoyuan Group jumped 5.2% in Hong Kong after the property developer reported a 99% jump in contracted sales for November.

China Yuhua Education added 1.9% to HK$4.90. The company on Monday reported a 30% jump in adjusted net profit for the year ended Aug. 31 and a 43% increase in revenue. Goldman Sachs said the results beat expectations. The brokerage rates the stock a "buy" with a price target of HK$5.10.

--Benny Kung

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