Hong Kong shares may start higher, HSI due for 5th weekly gain
July 26 (Reuters) - Hong Kong shares are expected to start higher on Friday underpinned by optimism over policy support on the Chinese mainland, setting the Hang Seng Index benchmark on its way to a fifth-straight weekly gain.
The People's Bank of China will continue to operate a prudent monetary policy to improve the financial environment for small companies, the central bank governor wrote in an article published on Friday, the latest in a series of supportive official remarks as the economy slows.
The Hang Seng Index ended down 0.3 percent at 21,901 points. The China Enterprises Index of the top Chinese listings in Hong Kong also fell 0.3 percent. On the week, they are up 2.5 and 3.2 percent, respectively.
Elsewhere in Asia at 0040 GMT, Japan's Nikkei was down 1.9 percent, while South Korea's was up 0.3 percent.
FACTORS TO WATCH:
* AIA Group Ltd, Asia's third-biggest insurer, reported on Friday a 26 percent increase in its value of new business in the first half of the year.
* Canada's No. 3 integrated oil company Husky Energy Inc , a unit of Hutchison Whampoa Ltd, reported a better-than-expected quarterly profit as production rose and the company realised higher prices.
* Telefonica said it believes it has compelling arguments to convince European antitrust regulators to approve its proposed acquisition of KPN's Germany unit and sale of its Ireland business to Hutchison.
* China's Hanergy Holding Group Ltd, which controls Hong Kong-listed Hanergy Solar, said it had acquired U.S. firm Global Solar Energy Inc, its third overseas purchase of a solar company in the past year as it beefs up its solar panel production technology.
* Shanghai Fosun Pharmaceutical (Group) Co Ltd , a unit of China's Fosun International Ltd , said on Thursday it expected its first-half net profit to rise more than 40 percent year-on-year.
* Italian fashion house Prada said it is proposing to issue 130 million euros of 2.75 per cent notes due in 2018, raising proceeds for general corporate purposes.
* French cosmetics group L'Occitane International S.A. said its net sales increased 1.9 percent year on year to 220.6 million euros ($291.98 million) for the three months ended in June, and local currency growth was 7.5 percent. Same store sales grew 0.8 percent over the quarter, compared to 0.7 percent growth in the same period last year.