HK shares seen lower, led by banks and resources

HONG KONG, Feb 18 (Reuters) - Hong Kong shares are expected to start lower on Wednesday on fears that the financial market and the economy may go down another leg after Wall Street slid on worries over risks to European banks from the credit turmoil. Analysts noted that losses on Wall Street, despite the signing of the $787 billion economic stimulus bill into law, suggests that support measures may not be adequate to save the financial system or stave off a deep recession.

Commodity counters are set to come under further pressure after oil prices dropped 7 percent overnight and were trading below $35 per barrel in Asian trade on Wednesday.

HSBC (0005.HK) and Standard Chartered (2888.HK) were also expected to be sold down sharply after their Wall Street peers were slammed on fears about the financial health of European banks. The benchmark Hang Seng Index .HSI recorded its biggest percentage drop in five weeks on Tuesday, falling 3.8 percent to 12,945.40. The main index tested a multi-year low of 10,676.29 in October 2008.

STOCKS TO WATCH-

* Angang Steel (0347.HK) said late on Tuesday its board of directors approved its plan to issue a first tranche of up to 10 billion yuan worth of domestic corporate bonds with maturity of between 5 and 10 years. Angang is looking to raise capital to repay loans, adjust debt structure and for working capital. The bond issue is subject to regulatory approval. For statement please click here

* China Agri-Industries (0606.HK) said on Tuesday it would buy soybean and peanut oil production and corn processing businesses in China from the controlling shareholder for HK$972.8 million.

The deal will be settled by the issue of 263.6 million shares, or 6.8 percent of enlarged share capital, at HK$3.69 each. It will also buy equipment and machinery assets for HK$112.8 million in cash. For statement please click here

* Crocodile Garments (0122.HK) said late on Tuesday its chairman Lam Kin Ming plans to take the garments and property investment firm private by offering shareholders HK$0.40 per share for all outstanding 298.915 million shares he does not already own for about HK$119.6 million. The offer price represents a 92.3 percent premium over its last trading price of HK$0.208 a share on Feb 10. Trading in the shares will resume on Wednesday. For statement please click here

* First Pacific (0142.HK) said it expected a non-cash loss from its subsidiary Indofood Agri Resources would not have a material impact on the company's 2008 net profit, which is due to be announced on March 25. For statement please see here

* South China Holdings Ltd (0265.HK) and its subsidiary South China (China) Ltd (0413.HK) said in a joint statement they were in an early stage of consideration to spin-off each of their toys, electronics and shoes businesses for a separate listing on the Hong Kong stock exchange but gave no further details. For statement please click here

* Guoco Group (0053.HK) on Tuesday posted a HK$2.5 billion loss in its interim ended in December amid the economic downturn, against HK$1.02 billion profit in the year ago period. For statement please see here ----------------------MARKET SNAPSHOT @ 2339 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 789.17 -4.56% -37.670 USD/JPY JPY= 92.40 -0.01% -0.010 10-YR US TSY YLD US10YT=RR 2.904 -- 0.251 SPOT GOLD XAU= $966.75 -0.17% -1.600 US CRUDE CLc1 34.91 -0.06% 0.000 DOW JONES .DJI 7552.60 -3.79% -297.81 ASIA ADRS .BKAS 81.45 -6.19% -5.37 ------------------------------------------------------------- > US STOCKS-Market sinks to Nov lows on bank, recession fears [.N] > U.S. oil falls 7 pct to below $35 on demand, economy [O/R] > TREASURIES-Bonds rally as stocks slide [US/] > FOREX-Dollar gains broadly while euro, yen tumble [USD/] > PRECIOUS-Gold sent to 7-month high by risk averse [GOL/]

(Reporting by Parvathy Ullatil; Editing by Jacqueline Wong) (parvathy.ullatil@thomsonreuters.com; +852 2843-6415))

ASIA-PACIFIC STOCK MARKETS: Pan-Asia......[STXNEWS/AS] Japan........[.T] S.Korea....[.KS] S.E. Asia............[.SO] Hong Kong...[.HK] Taiwan.....[.TW] Australia/NZ.........[.AX] India.......[.BO] China......[.SS]

OTHER MARKETS: Wall Street...........[.N] Gold.........[GOL/] Currency..[FRX/] Eurostocks...........[.EU] Oil...........[O/R] JP bonds...[JP/] ADR Report..........[ADR/] LME metals..[MET/L] US bonds...[US/] Stocks News US...[STXNEWS/US] Stocks News Europe...[STXNEWS/EU]

DIARIES & DATA: IPO diary & data <TW/IPOMENU> Asia earnings diary [ASIA/EQTY] U.S. earnings diary [RESF/US] European diary [WEU/EQTY] Taiwan diary [TW/DIARY] Wall Street Week Ahead [.N/O] Eurostocks Week Ahead [.EU/O] World forecasts EQUITYPOLL1