Hong Kong shares set for cautious start, almost overbought

Wed Jan 11, 2012 7:52pm EST

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HONG KONG, Jan 12 (Reuters) - Hong Kong shares could
start flat or slightly weaker on Thursday, with global markets
cautious ahead of key bond auctions in Spain and Italy. 	
    China is also scheduled to release economic data at about
0130 GMT that is expected to show annual inflation in the
world's second largest economy slowed to 4.0 percent in December
from 4.2 percent in November.   	
    A higher inflation reading could be negative for risk
appetite as it could keep China from adding further stimulus to
its economy.    	
    The Hang Seng Index is near technically overbought
territory after gaining 3 percent this week to date, led by
A-share sensitive names on hopes of monetary policy easing after
favorable data and several share buybacks in mainland markets
seen as forms of government intervention.    	
    Its 14-day relative strength index (RSI) value stands at
67.7, with a reading above 70 suggesting the benchmark is
overbought.    	
    On Wednesday, the China Enterprises Index of the top
mainland listings in Hong Kong rose 1 percent, helping the
broader Hang Seng Index finish 0.8 percent higher at
19,151.9 points, with turnover marginally lower than Tuesday.   	
    On Thursday, Huazhong Holdings Co Ltd, Huili
Resources (Group) Ltd, Kai Shi China Holdings Company
Limited and PC Partner Group Ltd will debut
on the Hong Kong bourse.	
    Elsewhere in Asia, Japan's benchmark Nikkei was down
0.6 percent at 8,396.9 points, while the Korea Composite Stock
Price Index (KOSPI) was up 0.2 percent at 1,849.9 points
at 0040 GMT.   	
    	
    HOT STOCKS	
    * The world's No. 1 iron ore exporter Vale 
 said on Wednesday it has declared force majeure on ore
shipments due to heavy rainfall affecting its operations in
Brazil. 	
    * CITIC Securities Co , China's biggest
brokerage by assets, has slashed its proprietary businesses amid
trading losses, local media reported on Wednesday, as Chinese
brokerages brace themselves for a dismal earnings season ahead.
 	
    * Chinese carmaker Geely Automobile Holdings Ltd 
said on Wednesday that sales rose 1.3 percent in 2011 but fell
short of its full-year target of 480,000 vehicles as the world's
largest car market slows. It set its 2012 target at 460,000
vehicles. 	
    * Alibaba Group, parent of Alibaba.com Ltd
, has reduced the size of its debut loan to $3 billion,
the funds which the Chinese e-commerce giant plans to use to buy
back part of the 40 percent stake held by Yahoo Inc,
three sources familiar with the matter told Reuters on
Wednesday. 	
    * Sa Sa International Holdings Ltd said its same
store sales grew 20.7 percent year-on-year for the three-months
ended in December, while retail and wholesale turnover rose 28.9
percent to HK$1.81 billion. For statement click here	
    * Anhui Conch Cement Co Ltd said it expected to
record an increase of over 80 percent in net profit for 2011
from the prior year. For statement click here	
    * First Shanghai Investments Ltd said it expected
to record a loss for 2011 compared with a profit in the previous
year due to losses on its trading portfolio as a result of a
downturn in the world's equity markets. For statement click here	
    * China Railway Construction Corp Ltd said it
estimated its profit for 2011 to increase by over 50 percent
from the prior year as its 2010 results included lossses from
Mecca Light Rail Project. For statement click here
  	
    * CSR Corporation Ltd said the China Securities
Regulatory Commission had approved its A share issue plan and
that it would make a further announcement once it receives an
official approval document from the CSRC. For statement click here	
    * First Tractor Co Ltd said the CSRC had approved
its issue of A shares and that it would make further
announcements once it received formal written approval from the
CSRC and when pricing and other terms for the issue have been
finalised. For statement click here	
    	
  MARKET SUMMARY  	
> Wall St steady near 5-month high; awaits Europe test      	
> Euro under the cosh; China inflation data eyed          	
> U.S. government debt rises as euro fears drive safety    	
> Gold hits 1-month high, breaks ranks with euro          	
> Oil down as U.S. crude stockpiles rise                   	
	
 (Reporting by Clement Tan and Donny Kwok; Editing by Jonathan
Hopfner)
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