HK Shares Return Early Gains To Log Losses

Local shares reversed course and dipped nearly 400 points towards the close on Thursday, while the rest of the region ended mostly higher as investors traded cautiously ahead of the release of new US jobs data.

The Hang Seng Index tracked gains on Wall Street, starting 67 points higher. But it soon changed direction, with selling accelerating in the afternoon after a report said the US is mulling devising a new blacklist that could see more Chinese firms facing financial penalties.

Analysts said the index rebalancing of the benchmark, that will see some companies' weighting trimmed, also played a part in the slide. The local benchmark finished the day down 331 points, or 1.1 percent, at 28,966.

Market turnover was HK$138.9 billion.

Tech shares and financials were under pressure. Tencent dropped 2.1 percent, Alibaba shed 1.7 percent, Meituan retreated 1.4 percent. AIA and Hong Kong Exchanges and Clearing each gave up about 1.7 percent.

But Xiaomi headed in the other direction, jumping 2.4 percent, after index provider FTSE Russell said the smartphone maker will be re-included in its China 50 Index.

The top blue-chip gainer was AAC Technologies, which surged more than five percent

Shares across the border also headed south. The Shanghai Composite Index edged down 0.4 percent, while the CSI300 index declined 0.7 percent. The Shenzhen Composite was 0.3 percent weaker.

Elsewhere in the region, Tokyo's Nikkei was 0.4 percent firmer. The Kospi in Seoul added 0.7 percent. Taiwan put on 0.5 percent. Australian shares gained 0.6 percent. Singapore was slightly higher.