HK shares to be volatile, could drop to 13,000

HONG KONG Oct 24 (Reuters) - Hong Kong shares are set for another volatile session on Friday, with financial and property stocks likely to stay under pressure but resources stocks expected to enjoy a respite amid higher crude oil prices.

Declining corporate profitability and exposure to currency hedging instruments will remain in focus ahead of a host of key earnings on Friday.

Top lenders ICBC (1398.HK) and China Constructiona Bank (0939.HK) will announce their results today along with Aluminum Corp of China (2600.HK), Datang Power (0991.HK) and China Coal (1898.HK).

"Despite overnight gains in the U.S., the trend in the local market is still very negative and we still have a chance to hit 13,000 points today," said Conita Hung, head of equity markets with Delta Asia Financial Group.

U.S. stocks clawed back from five-year lows on Thursday, led by a bounce in energy and health-care stocks after oil recovered from a 16-month trough and top pharmaceutical companies posted reassuring earnings.

Crude oil rebounded 4 percent on Thursday as investors braced for a cut in OPEC output, while most other commodities traded down on fragile investor sentiment.

Hong Kong shares trimmed losses to 3.6 percent on Thursday to close at a new three-year low of 13,760.49 on hopes of further succour for the markets from the U.S. government.

STOCKS TO WATCH-

* Guangdong Investment Ltd (0270.HK) revealed late on Thursday it had HK$6.4 billion worth of interest-rate swap agreements but did not have any outstanding foreign exchange rate swap agreements. The company said its gain or loss arising from the interest rate swaps would not have a material impact on its financial position. For statement please see here

* Jingwei Textile Machinery (0350.HK) late on Thursday warned of a more than 50 percent fall in profit for 2008 amid appreciation of the yuan, tightening monetary policy, rising production costs, and declining demand in the national textile industry which hit production and sales of textile machinery. It posted 162.21 million yuan profit in 2007. For statement please see here

* China High Speed Transmission Equipment (0658.HK) said on Thursday it was in talks with Morgan Stanley & Co. International plc in respect of amending the terms of an equity swap.

But it said the equity swap does not pose any effect on the cash flow or normal operations of the company.

The stock fell 29 percent on Thursday after CLSA reported the firm exposed to a hedge linked to its share price it signed with Morgan Stanley in May.

* ZTE (0763.HK) won orders from China Mobile to build a fixed line internet network in Fujian province, said the South China Morning Post citing senior management official from ZTE. ------------------MARKET SNAPSHOT @ 2351 GMT------------------

INSTRUMENT LAST PCT CHG NET CHG

S&P 500 .SPX 908.11 1.26% 11.330

USD/JPY JPY= 97.64 -0.37% -0.360

10-YR US TSY YLD US10YT=RR 3.676 -- -0.011

SPOT GOLD XAU= $722.45 -0.01% -0.050

US CRUDE CLc1 $69.27 2.02% 1.430

DOW JONES .DJI 8691.25 2.02% 172.04

ASIA ADRS .BKAS 91.99 0.23% 0.21 ------------------------------------------------------------- > US STOCKS-Wall St rebounds on energy, drug strength [.N] > U.S. crude rises more than $1 before OPEC meeting [O/R] > FOREX-Dollar climbs two-year peaks but ends lower [USD/] > SEA Stock-Slide on global fears, S'pore at 4-½ year low [.SO] > TREASURIES-Bonds dip as stocks claw back from 5-year low [US/] > Gold hits 13-month low on fund liquidity concern [GOL/]

(Reporting by Parvathy Ullatil; Editing by Anne Marie Roantree)