Hong Kong shares seen starting week lower

HONG KONG Jan 16 (Reuters) - Hong Kong shares are poised to start what could be a volatile week moderately lower on Monday, with more China economic data expected and reduced turnover seen ahead of the Chinese New Year holidays.

Global markets were broadly weaker after rating agency S&P cut ratings on nine of the euro zone's 17 countries over the weekend, including top-notch France and Austria, and said it would decide shortly whether to downgrade the euro zone's bailout fund.

Markets in the United States are closed on Monday for the Martin Luther King holiday.

On Friday, the Hang Seng Index shrugged off weakness in mainland markets to finish up 0.6 percent on the day and up 3.3 percent on the week at 19,204.4 points. The China Enterprises Index jumped 6.5 percent last week.

Gains on the Hang Seng Index were however capped at 18,242, its December high. If that level is breached, the next target on the charts is seen at the benchmark's high on Nov 14 last year at about 19,640.

China will post fourth-quarter GDP data on Jan 17, along with December industrial output, investment and retail sales figures, which could spur gains and help benchmark indexes break technical resistance.

Short selling accounted for 9.6 percent of total turnover on the Hong Kong bourse on Friday and averaged about 8 percent last week, driven mainly by specific interest in stocks such as China Construction Bank (CCB), for which short interest averaged 27 percent last week.

A big part of the concern with the Chinese banking sector, despite its attractive valuations, is the uncertainty about its exposure to debt in the mainland.

"Although the market has some concerns that their recapitalization debts may be rolled over and never repaid, we note that more than 40 percent of them have been repaid since 2008...and forecast that they will be fully reimbursed by end-2017," Barclays analysts said in a Monday report, maintaining their positive view on the sector.

The Chinese property sector could come under pressure after state radio reported on Sunday that the price of land for building homes in China continued to fall in the last three months in more than a third of its cities compared with the previous quarter, and will probably continue to head south in the next few months.

Separately, Chinese Premier Wen Jiabao has called for farmers' land rights to be protected and criticised a widespread policy of moving villagers into apartment blocks so their land can be merged into larger blocs or developed.

Britain is teaming up with Hong Kong to secure London a top spot as an offshore trading centre for the Chinese currency, as the UK aims to boost trade and investment ties with fast-growing Asian markets.

Elsewhere in Asia, Japan's benchmark Nikkei was down 1.4 percent at 8,380.3 points, while the Korea Composite Stock Price Index (KOSPI) was down 1 percent at 1,856.5 points at 0034 GMT.

STOCKS TO WATCH

* Ping An Insurance (Group) Co of China Ltd , the world's second-biggest life insurer by market value, said on Saturday its 2011 insurance premium revenue was 207.4 billion yuan ($32.9 billion).

* CITIC Securities , China's biggest brokerage by assets, said on Saturday its 2011 net profit rose 11.1 percent to 12.6 billion yuan ($2 billion).

* Metallurgical Corporation of China (MCC) said on Saturday it had won 286.7 billion yuan ($45.5 billion) in new contracts in 2011, up 0.6 percent from a year earlier.

* Great Wall Motor Co Ltd, China's top manufacturer of sport utility vehicles and pick-up trucks, said its 2011 net profit rose a market-beating 29 percent, as demand picked up.

* Apple Inc, a company notorious for keeping its supply chain a secret, for the first time released a list of its major suppliers. The list includes Hong Kong-listed AAC Technologies Holdings Inc.

* AVIC International Holding (HK) Ltd said it expected to record a substantial increase in profit for the year ended December 31, 2011, mainly boosted by disposals of a subsidiary and financial investments. here MARKET SUMMARY > Wall St slips on reports of euro-zone downgrades > Euro defensive after mass ratings downgrades > Treasuries climb on expected euro-zone debt downgrades > Gold falls 1 pct on euro zone downgrade talk > Oil falls on euro zone worries, posts weekly loss (Reporting by Clement Tan and Lee Chyen Yee; Editing by Jonathan Hopfner)