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Equities

Hong Kong stocks pull back after four-day winning streak

Bubble-tea retailer B & S International soars on trading debut

HONG KONG (Nikkei Markets) -- Hong Kong shares closed lower on Wednesday for the first time in five days, with banks pacing declines for mainland Chinese companies listed in the city and Apple suppliers losing ground on weak overnight cues.

The Hang Seng Index fell 0.5% to 31,435.01. Apple suppliers AAC Technologies Holdings shed 2.8% and Sunny Optical Technology Group dropped 2.2%, the two worst performers on the 50-stock index, after the iPhone maker retreated and the Nasdaq Composite halted a seven-day run of gains. China Life Insurance lost 1.1%, after reporting an 18.6% decline in accumulated premium income for January and February. Industrial & Commercial Bank of China (ICBC) and China Construction Bank (CCB) slid 1.4% and 1.3%, respectively, after a recent string of strong performances.

U.S. President Donald Trump on Tuesday fired Secretary of State Rex Tillerson, replacing him with Central Intelligence Agency Director Mike Pompeo, the latest in a series of changes in the administration over the past year. Separately, Reuters reported, citing two people who had discussed the issue with the Trump administration, that the president is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors.

"I think Hong Kong equities will see a slower climbing path," said Andy Wong, chief investment strategist at wealth management company Harris Fraser (International). "It is better to avoid trade-related stocks when we see a correction and buy into stocks with less correlation with the outside world."

Wong expects the city's stock market to remain range-bound, with 32,400 pegged as a resistance level for the Hang Seng Index, and 30,500 as support.

The Hang Seng China Enterprises Index of large mainland companies listed in the city fell 0.5%.

In the mainland, the Shanghai Composite Index shed 0.6%, while its Shenzhen counterpart lost 0.9%. The Nikkei Asia300 Index slipped 0.4%.

B & S International, a retailer of bubble tea in Hong Kong, nearly quadrupled in its trading debut after raising HK$100 million ($12.8 million) in gross proceeds from an initial public offering. The stock closed at HK$3.98, compared with its IPO price of HK$1.00, and was among the 10 most actively traded stocks on the city's main board.

Airfreight forwarding services company A & S Group Holdings, also debuting in Hong Kong on Wednesday, climbed to 53 Hong Kong cents, compared with its IPO price of 48 Hong Kong cents.

Software products and services company Kingdee International Software Group was another actively traded stock. It jumped almost 15% after reporting a 7.6% increase in net profit for 2017. Company officials said the group's revenue was on track to rise by 3.5 billion-4.5 billion yuan ($553.3 million-$711.4 million) by 2020 from 2.3 billion yuan last year, driven by its cloud services business.

Cathay Pacific Airways ended unchanged in Hong Kong after reporting a smaller-than-expected loss of HK$1.26 billion for 2017, although it was more than twice the loss it had the previous year. Revenue rose 4.9% to HK$97.3 billion.

Nexteer Automotive Group tumbled 15.9%. The company said late on Tuesday that its 2017 profit was up about 19.4% from the previous year at $351.8 million, while revenue rose 0.9% to $3.88 billion.

Cosmetics chain Sa Sa International Holdings rallied 9.3% after reporting a 14.6% increase in retail sales in Hong Kong and Macau during January and February.

CIFI Holdings rose 1% after the property developer said its net profit jumped 72% to 4.83 billion yuan last year. The company's chairman said at a post-earnings news conference in Hong Kong that it expects profits to grow at a compounded annual rate of at least 40% until 2021.

-- Amy Lam

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