HK shares seen lower on Wall Street fall

HONG KONG, May 22 (Reuters) - Hong Kong shares are expected
to trade lower for a third straight session on Friday, following
a broad sell-off in the U.S. on worries about the U.S. budget
deficit, casting doubt over a quick recovery for the world's
largest economy.

But losses may be limited as liquidity is still parked in
Asian markets and shifting from sector to sector, dealers said.

"There's a downside of no more than 200 to 300 points as
liquidity is still strong in the region," said Ben Kwong, chief
operating officer at KGI Asia. "We should see support at the
16,800-point level."

On Thursday, the benchmark Hang Seng Index .HSI, falling
for a second straight day, ended 1.58 percent down at 17,199.49
in shrinking turnover as optimism about a global economic
recovery waned.

STOCKS TO WATCH

* Lenovo Group Ltd (0992.HK) on Thursday posted a second
straight quarterly loss that was worse than analysts forecasts as
a result of restructuring costs, and forecast more pain for this
year because of the global economic downturn. [ID:nTP371236]

* SJM Holdings Ltd (0880.HK), the casino flagship of Macau
tycoon Stanley Ho, on Thursday said the gaming industry in the
former Portuguese enclave of Macau was recovering as market
sentiment improved on hopes for economic recovery, and the
company was eyeing acquisition opportunities. [ID:nHKG18354]

* China Timber Resources (0269.HK) said it would buy a
Chinese property developer for HK$986 million, a deal to be
settled by issue of convertible bonds, promissory note, new
shares and cash. For statement please click
here
----------------------MARKET SNAPSHOT @ 2247 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 888.33 -1.68% -15.140
USD/JPY JPY= 94.12 -0.24% -0.230
10-YR US TSY YLD US10YT=RR 3.3794 -- 0.000
SPOT GOLD XAU= 953.4 0.00% 0.000
US CRUDE CLc1 61.27 0.36% 0.220
DOW JONES .DJI 8292.13 -1.54% -129.91
ASIA ADRS .BKAS 106.52 -1.73% -1.88
-------------------------------------------------------------

MARKETS SUMMARY
*U.S. stocks, dollar tumble on credit worries [nN21265045]
*Oil falls from 6-mnth peak as jobs, Fed data weigh [nSIN101873]
*Dollar falls to 2009 low as debt worries rise [nN21307095]
*Treasuries plunge as US assets under pressure [nN21524042]
(US$1=HK$7.8)
(Reporting by Donny Kwok; editing by Chris Lewis)