HK shares seen little changed after Wall St's fall

HONG KONG, May 12 (Reuters) - Hong Kong shares are expected
to trade sideways in early trading Tuesday as the market
consolidates gains from a recent seven-day rally, after Wall
Street fell overnight on profit-taking in banking stocks.

The financial sector may show some negative reaction but
adequate liquidity is expected to provide underlying support to
the market.

"The market is in a stage of consolidation but the level of
liquidity remains high. I don't expect much impact from the U.S.
overnight trading because overall sentiment is still generally
positive," said Conita Hung, head of research at Delta Asia
Financial Group.

The benchmark Hang Seng Index .HSI on Monday finished down
301.92 points at 17,087.95, just 1.74 percent off a seven-month
high.

STOCKS TO WATCH

* China High Speed Transmission (0658.HK) said its largest
shareholder Fortune Apex Ltd would dispose of 65 million shares
or a 5.22 percent stake in the company, reducing its holding to
21.56 percent. The announcement did not mention a price for the
stake sale.
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* Hong Kong Exchanges and Clearing Ltd (0388.HK) will release
its first-quarter results on Wednesday and may draw speculative
trade. The bourse operator is forecast to report a fourth
consecutive quarterly profit decline with average daily turnover
dropping off to HK$45 billion as investors turned away from the
market. Turnover has increased since April, but HKEx remains the
most expensive stock among its Asian peers.

* Tencent (0700.HK) is also due to report its first-quarter
results on Wednesday, while Cathay Pacific (0293.HK) and Li &
Fung (0494.HK) hold their annual general meetings on the same
day.

* PCCW (0008.HK) is not expected to have any dramatic
influence on the benchmark index with a possible reaction to a
plan by its majority shareholders to file a final appeal on their
bid to take the company private. The share price has already
dropped considerably, but analysts said they would still continue
to watch the stock for its medium-term prospects.
(Reporting by Nerilyn Tenorio; Editing by Chris Lewis)