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Stocks

Financials lead Hong Kong shares higher ahead of holidays

Fosun jumps 7% after deal to buy stake in Tsingtao Brewery; Tsingtao falls

HONG KONG (Nikkei Markets) -- Hong Kong shares rose by midday on Thursday, outperforming most other regional markets, as financial sector heavyweights advanced.

The Hang Seng Index was up 0.5% to 29,378.70 by the noon break. Global financial companies listed in Hong Kong, including insurer AIA Group and lender HSBC Holdings, added 1% and 0.4%, respectively, as U.S. borrowing costs hovered near multimonth highs. Heavyweight social-media major Tencent Holdings climbed 1.1%. The three stocks were headed for their third gain this week. Ping An Insurance Group and China Life Insurance advanced 2.5% and 1.2%, respectively.

The yield on 10-year U.S. government bonds traded near a nine-month high after the House of Representatives gave its final approval for a tax overhaul in the world's largest economy. But U.S. equity indexes ended lower for a second day on Wednesday, after rising to record highs earlier this week. The Nikkei Asia300 Index of more than 300 regional companies was little changed.

More than 48 billion Hong Kong dollars ($6.14 billion) worth of stocks had changed hands on Hong Kong's main board by midday on Thursday, weaker than the turnover at the same time in recent weeks.

"The holiday mood is affecting the Hong Kong stock market," said Kenny Wen, wealth-management strategist at Everbright Sun Hung Kai. Both buyers and sellers lacked an "incentive" to trade at the current market level as the year-end approached, Wen said.

In mainland China, the Shanghai Composite Index added 0.5%, while its Shenzhen counterpart rose 0.6%. The yield on China's 10-year government bond was at 3.93%, heading for a second consecutive rise after declining for five days. Concern over high borrowing costs in Asia's largest economy has weighed on sentiment for Chinese stocks recently.

Fosun International rose 7% to a one-month high. The Chinese conglomerate plans to buy 243.1 million shares in Tsingtao Brewery for HK$6.62 billion from Japan's Asahi Group Holdings. Tsingtao Brewery shares were down 3.3% by noon after sliding as much as 7% earlier in the day.

"What surprised the market is its large discount offered by the seller," Wen said. "But I have concerns over the longer-term prospects of the deal. The competition in the beer industry is intense, and Fosun International does not have much synergy with Tsingtao Brewery."

GCL New Energy Holdings added 1.9%. The Chinese solar-power-station operator said it entered deals with two separate companies to sell certain power assets for 922 million yuan ($140 million), and then lease them back.

Shui On Land fell 0.9% after saying it plans to buy Shanghai Xin Wan Jing Property for 1.14 billion yuan.

Colour Life Services Group dropped 1.5% to HK$5.27 after the Chinese property management company said it plans to raise money by placing up to 87.2 million shares at HK$5.00 apiece.

Orange Sky Golden Harvest Entertainment Holdings jumped 17.1% after saying its board plans to meet on Jan. 4 to consider a special dividend.

-- Amy Lam

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