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Stocks

Trump turmoil drags down Hong Kong shares as Apple supplier AAC trading halted

HONG KONG (Nikkei Markets) -- Hong Kong shares fell the most in almost two weeks Thursday, as mounting worries over the fate of U.S. President Donald Trump's economic agenda sparked a selloff in global equity markets.

The Hang Seng Index fell 0.6% to 25,136.52, capping a third day of declines. AAC Technologies Holdings slumped almost 10% before shares were suspended in the final hour of trading. The suspension came as short-seller Gotham City Research issued a more detailed report on its website questioning the Apple supplier's accounting practices and profit margins. The shares have lost more than 25% of their value since Gotham City first issued a preview of the report. An official in AAC's investor relations department said the company was working on an announcement and didn't have any further comments.

Galaxy Entertainment Group fell 1.9% and Sands China dropped 1% after Macau's gaming regulator said the gambling hub has stepped up auditing of the junket industry, Reuters reported. Robust gains for heavyweight Tencent Holdings provided support amid broad market weakness. The technology giant rose 1.6% to a record high after reporting better-than-expected March quarter results.

The day's losses followed an overnight slump for U.S. equities as Trump came under fire on reports he tried to interfere with a federal investigation. The news, coupled with allegations he disclosed sensitive information to a Russian diplomat and his recent move to dismiss the nation's top law enforcement official, have raised concerns about his ability to pass promised economic policies. The CBOE Volatility Index, also called the "fear gauge," spiked 46% in its largest daily jump in a year on Wednesday. The VIX had dropped to a 23-year low as recently as last week.

"The increase in volatility will be a concern for investors and negative for equities," said Sam Chi-yung, senior strategist at South China Financial. Sam said he "remains positive" on Hong Kong stocks as long as the Hang Seng Index stays above 24,600.

Other regional markets also fell, with the Nikkei Asia300 Index shedding 0.4%.

In the mainland, the Shanghai Composite fell 0.5% and the Shenzhen benchmark shed 0.6%. New home prices rose last month in 58 of the 70 cities tracked by China's National Bureau of Statistics, data released Thursday showed. New home prices in the nation rose 0.7% in April from the previous month, according to a Reuters calculation.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong fell 1.1%, paced by declines in insurers. China Life Insurance fell 1.8% and New China Life Insurance lost 2.9%.

China Machinery Engineering rose 0.5% after signing an agreement worth $1.6 billion with Argentina's Ministry of Transportation for a railway project.

GCL-Poly Energy Holdings slumped 8.5% after reporting a 43% decline in polysilicon sales for the first quarter.

Xingfa Aluminium Holdings plunged 11% after the company said a proposed privatization will not proceed. The proposal was not approved by the required majority of shareholders at a meeting Wednesday, the company said.

KWG Property Holdings fell 1.8% after Standard & Poor's late Wednesday cut its debt rating to B+ from BB-. The agency raised its outlook to "stable" from "negative."

Parkson Retail Group added 1% after swinging to a profit in the March quarter.

Dan Form Holdings closed 12% lower as trading resumed for the first time in 2017 after the property investor said its public float has been restored at more than 25%.

Boyaa Interactive International jumped 6% after the online card-and-board gamemaker said March profit rose 13.5%.

-- Nimesh Vora and V.Phani Kumar

--Nikkei Markets is a real-time financial news service for South East Asia's markets published by Nikkei NewsRise Asia Pte Ltd, a Nikkei and NewsRise joint venture company. Nikkei Markets provides wide companies coverage in the region, including the Nikkei's Asia300 companies.

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