Recovery seen for HK stocks after US rate cut

HONG KONG, Jan 23 (Reuters) - Hong Kong stocks should find a
toehold on Wednesday as an emergency interest rate cut by the
Federal Reserve is expected to halt a two-day sell-off that took
China plays to their worst performance in 10 years.

The Hong Kong Monetary Authority (HKMA) followed the U.S.
rate cut by lowering its overnight discount window by 75 basis
points to 5.00 percent [ID:nHKG80642].

Rate-sensitive property stocks will lead the rebound, said
Conita Hung, head of equity markets at Delta Asia Financial.

Hung said the market should see a 1,000-point bounce at the
open, but may recoil as investors unload into strength.

Still, the market is expected to end in positive territory
and trade around 24,500 on the day.

"For the China insurers, we should see a good rebound. But
the raw materials, they will still be weak -- their rebound will
be on a smaller scale."

UBS downgraded emerging markets to "neutral" from
"overweight", saying global emerging markets have witnessed
significant outperformance relative to the world, but
circumstances are changing with the global economic environment
uncertain and challenging [ID:nWNA5730].

The benchmark Hang Seng index .HSI fell 8.7 percent to
21,757.63 on Tuesday. The China Enterprises Index of Hong
Kong-listed mainland companies .HSCE shed 12 percent to
11,911.91, in their biggest one-day loss in 10 years.

STOCKS TO WATCH:

*Bank of China (3988.HK), the country's top foreign exchange
lender, said on Tuesday its post-tax profit rose last year,
refuting a media report that its 2007 earnings might drop due to
its exposure to U.S. subprime loans [ID:nSHA62570]

* Mainland lender Bank of Communications (601328.SS)(3328.HK)
estimated on Tuesday that net profit rose at least 60 percent in
2007.

The bank cited rapid loan growth and rising income from
intermediary business. In 2006, it made a net profit attributable
to shareholders in the parent company of 12.55 billion yuan
($1.73 billion). [ID:nSHA28244]

* Jiangxi Copper Co Ltd (0358.HK), China's top integrated
copper producer, said it proposed to issue up to 6.8 billion yuan
(US$939.4 million) worth of bonds with warrants in China to fund
acquisitions and repay debts.
here

FACTORS TO WATCH:
* Nikkei .N225 surges more than 3 pct after Fed cut [.T]
* Recession fears hit Wall St but Fed cut helps [.N]
* STOCKS NEWS ASIA-Market factors, main events [STXNEWS/ASIA]
* Oil ends at one-month low on economic worries [O/R]
* Dollar extends losses vs euro after Fed cut [USD/]
* For upcoming Hong Kong events, click on [HK/DIARY]
* For Hong Kong press digest, click on [PRESS/HK]

KEY HK ADR MOVERS (by % change)

Asia Satellite SAT.N(1135.HK) +3.0

China East Air (CEA.N)(0670.HK) +1.3

China Telecom (CHA.N)(0728.HK) -10.5

Aluminum Corp (ACH.N)(2600.HK) -10.8

China Life (LFC.N)(2628.HK) -11
(US$1=HK$7.8)
(Reporting by Rita Chang; editing by Anne Marie Roantree)