HK shares expected to rise on US housing data

HONG KONG, June 3 (Reuters) - Hong Kong shares are seen
gaining on Wednesday, winning back some ground lost in the
previous session, after data showed U.S. pending home sales for
April leapt, drumming up hopes for economic recovery.

But gains may be sluggish, said analysts, as the market
enters a consolidation phase following its 18 percent gain since
the beginning of May.

The main index is currently trading above 16.5 times the
estimated earnings of its constituents in 2009, a level many
market watchers consider unjustified as major global economies
continue to battle the recession.

Bulk shippers including China Cosco (1919.HK) and China
Shipping Development (1138.HK) may hit the spotlight after the
key gauge for measuring changes in sea freight surged 11.5
percent overnight.

The Baltic Dry Index .BADI jumped to an eight-month high,
propelled by increased Chinese imports of iron ore.

The benchmark Hang Seng Index .HSI dropped 2.6 percent on
Tuesday, falling off an eight-month high, as investors locked in
gains on the recent rally.

STOCKS TO WATCH-

* Manulife Financial Corporation (0945.HK) on Wednesday said
it had completed its offering of $1 billion worth of 4.896
percent medium term notes due 2014. For statement please click
here

* China port operator China Merchants Holdings (0144.HK) was
keen to invest in Taiwan's biggest port in Kaohsiung, taking
advantage of an improved cross-strait relations, the South China
Morning Postreported, citing company chairman Fu Yuning.

* Shenzhen Expressway (0548.HK) late on Tuesday said it would
pay in cash for its purchase of a 45 percent stake it did not
already own in eastern section of Jihe Expressway, or Shenzhen
Airport-Heao Expressway, from Road King Infrastructure (1098.HK)
for 1.07 billion yuan ($156.7 million), a deal to be settled by
internal resources and borrowings. Trading in the sharers will
resume on Wednesday. For statement please click
here

* Networking system distributor Delta Networks Inc (0722.HK)
said its controlling shareholder Delta Networks Holding had
sweetened an offer to take the company private to HK$2.20 per
share, up 20.2 percent from its previous offer of HK$1.83,
valuing the entire company at HK$2.63 billion. Trading in the
shares will resume on Wednesday. For statement please click
here
----------------------MARKET SNAPSHOT @ 2241 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 944.74 0.2% 1.870
USD/JPY JPY= 95.54 -0.1% -0.100
10-YR US TSY YLD US10YT=RR 3.4495 -- 0.000
SPOT GOLD XAU= 982.95 0.21% 2.100
US CRUDE CLc1 68.2 -0.51% -0.350
DOW JONES .DJI 8740.87 0.22% 19.43
ASIA ADRS .BKAS 113.99 -0.52% -0.60
-------------------------------------------------------------

MARKETS SUMMARY
*Housing data lifts Wall St; Aetna slides late [nN0267885]
*U.S. dollar hits 2009 low vs euro, currency [nN02579439]
*U.S. Treasuries rise as bargain-hunting emerges [nN02516109]
*Oil slips, profit-taking outweighs economic optimism[nSIN357259]

(Reporting by Parvathy Ullatil; Editing by Chris Lewis)