HONG KONG (Nikkei Markets) -- Hong Kong shares edged lower in a choppy morning session on Friday as lingering weakness in heavyweight Tencent Holdings overshadowed positive overnight cues from Wall Street.
The Hang Seng Index had fallen 0.1% to 29,138.74 by noon, after changing direction at least five times. The gauge had advanced as much as 0.6% earlier in the day. Social media and gaming major Tencent dropped 2.2%, heading for its third straight decline after rising to record highs last month following upbeat quarterly earnings.
Hong Kong's main gauge has closed lower in five of the last six sessions as locally listed Chinese companies retreat amid worries over elevated borrowing costs in Asia's largest economy. The Hang Seng China Enterprises Index of large Chinese companies listed in Hong Kong edged 0.2% higher on Friday, poised for its first advance in five days.
Kenny Wen, a strategist at Sun Hung Kai Financial, said investors remain concerned about Chinese equities amid worries over tightening policies and liquidity.
"It is hard for the Hang Seng Index to rise another 1,000 points even if U.S. tax reforms pass this year. Investors are also reluctant to be too positive around the year-end," he said.
The Nikkei Asia300 Index edged 0.1% lower despite a rally on Wall Street overnight spurred by hopes U.S. President Donald Trump's proposed corporate tax cuts will come to fruition after Republican Senator John McCain endorsed the bill.
Casino operators Galaxy Entertainment Group and Sands China rose 2.8% and 2.2% in Hong Kong, respectively, ahead of Macau gaming revenue data for November, due to be released Friday or early next week. Daiwa Capital Markets upgraded Galaxy Entertainment and Wynn Macau to "buy" from "hold" on Thursday while keeping its "buy" rating on Sands China, citing healthier fundamentals in Macau. Wynn Macau had advanced 2.5% by noon.
In the mainland, the Shanghai Composite fell 0.4% while its Shenzhen counterpart added 0.6%. The onshore traded yuan shed 0.1% against the dollar to 6.6145.
The expansion of China's factory activity slowed in November from a month earlier, a private survey by Caixin and Markit released on Friday showed. The Caixin manufacturing purchasing managers' index fell to 50.8 from 51 in October. On Thursday, an official survey showed China's manufacturing PMI unexpectedly improved last month.
Iron ore miner Prosperity International Holdings (H.K.) fell 2.2% in Hong Kong after reporting a net loss of HK$118.8 million ($15.2 million) for the six months ended Sept. 30, compared with a net profit of HK$89.1 million a year ago.
Come Sure Group (Holdings), a maker of corrugated products, jumped 41.3% after its profit for the six months ended Sept. 30 surged more than 10 times to HK$55.9 million. Revenue for the period rose 61%.
Chinlink International Holdings, a supply chain company, fell 0.9% after saying its loss for the six months ended Sept. 30 had widened to HK$75.9 million from HK$400,000 a year ago.
Foundation-works company New Concepts Holdings tumbled 4% after swinging to a loss of HK$38.5 million for the six months ended Sept. 30, compared with a profit of HK$22.77 million a year earlier.
Building contractor IBI Group Holdings climbed 6.7% following a more than 40-fold jump in profit for the six months ended Sept. 30.
-- Carrie Chen