HK shares seen moving higher after blue chip earnings

HONG KONG Aug 28 (Reuters) - Hong Kong shares are seen extending gains on Thursday as blue chip earnings over the past few days threw up more hits than misses, soothing pre-result jitters.

U.S. stocks rose on Wednesday as surprisingly strong data on durable goods orders soothed some concern about the sluggish economy while Fannie Mae and Freddie Mac led a rally in financial shares.

Fears of a powerful storm headed for the Gulf of Mexico sent crude oil rallying for a third straight session on Wednesday, lending support to other commodities such as metals and grains.

Hong Kong shares closed 1.9 percent higher on Wednesday, lifted by sharp post-earnings relief rallies in index heavyweights China Mobile (0941.HK) and China Life (2628.HK).

STOCKS TO WATCH-

* JP Morgan downgraded China Mobile to underweight from overweight and cut its target price by 50 percent to HK$75 on a tougher industry outlook.

China Mobile (0941.HK) beat forecasts with quarterly profit growth of 51 percent but the company now faces increasing competition in a shifting telecoms landscape, and pressure on traditional voice margins.

On Wednesday, the world's largest wireless carrier said it would launch high-speed, third-generation services in 38 cities by the end of June 2009, marking the first large-scale rollout of 3G for the country, ahead of rival Unicom (0762.HK).

* PetroChina Co Ltd (0857.HK) (PTR.N) (601857.SS), Asia's top oil and gas producer, posted a disappointing 38 percent dive in quarterly earnings after refining losses and windfall taxes dented gains from soaring crude prices.

Analysts expect the firm to face a tough time again in the second half, even after Beijing raised gasoline and diesel prices by 18 percent late in June, because the government may scrap a tax rebate on imported crude.

* Chinese offshore oil producer CNOOC Ltd (0883.HK) posted an 89 percent rise in first-half earnings alongside sky-rocketing crude prices. That beat a consensus forecast of 22.9 billion yuan from eight analysts polled by Reuters Estimates.

* Top Chinese electricity provider Huaneng Power International (0902.HK) posted a larger first-half loss than the market expected, after exorbitant coal prices wiped out earnings for the beleaguered sector.

On Wednesday, the company said it said it lost 544 million yuan ($79.4 million) in the first half, versus a 2.88 billion yuan ($421 million) net profit a year ago. That compared with a consensus forecast for a loss of 393 million yuan from four analysts polled by Reuters.

* Merrill Lynch downgraded Esprit Holdings (0330.HK) to underperform from buy after the fashion retailer posted a profit that fell short of expectations and cautioned investors of tougher times ahead.

Merrill Lynch cut earnings estimates by 15 to 16 percent for 2009 to 2010 and lowered its target price on Esprit to HK$75.8 from HK$105.5 per share.

* Foxconn International Holdings (2038.HK), the world's largest contract manufacturer of handsets, said its first half profit fell 56 percent from a year ago on increased operating expenses and poor product mix. ----------------------MARKET SNAPSHOT @ 2325 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1281.66 0.8% 10.150 USD/JPY JPY= 109.49 -0.05% -0.050 10-YR US TSY YLD US10YT=RR 3.7667 -- 0.000 SPOT GOLD XAU= 827.5 0.19% 1.600 US CRUDE CLc1 118.31 0.14% 0.160 DOW JONES .DJI 11502.51 0.79% 89.64 ASIA ADRS .BKAS 137.52 0.75% 1.03 -------------------------------------------------------------> > SEA Stocks-Political risk pushed Malaysia to 20-mth low [.SO] > US STOCKS-Strong U.S. data, financials drive stocks higher [.N] > Oil rises as Gustav threatens U.S. Gulf [O/R] > FOREX-U.S. dollar slides as ECB revives rate hike talk [USD/] > TREASURIES-Prices rebound after early hit from durables [US/] > Gold ends up on oil gains as dollar drops vs euro [GOL/]

(Reporting by Parvathy Ullatil; Editing by Ken Wills)