HK shares reverse gains, but HSBC cushions loss

(For Shanghai stock market reports, click [.SS])
(Adds Tuesday lunch close, details)

By Rita Chang

HONG KONG, March 4 (Reuters) - Hong Kong stocks retreated on
Tuesday, erasing earlier gains, as caution set in ahead of more
earnings results from companies such as Hong Kong Exchanges and
Clearing (0388.HK: Quote, Profile, Research, Stock Buzz) and Sun Hung Kai Properties (0016.HK: Quote, Profile, Research, Stock Buzz) this
week.

Chinese lenders and insurers fell, tracking sliding financial
shares traded in the mainland, on concerns that Ping An
Insurance's (2318.HK: Quote, Profile, Research, Stock Buzz) shareholders may approve its huge stock
issue plan on Wednesday.

But global bank HSBC Holdings plc (0005.HK: Quote, Profile, Research, Stock Buzz) climbed 1.3
percent to HK$120.90 after it posted forecast-beating results.

"HSBC's results were very good even after the huge
provisions," said Andrew To, sales director at Tai Fook
Securities.

"But the rest of the market is cautious. There's sideways
consolidation because of the reporting season. Investors would
like to look at the results before they make any major
decisions."

The market rose more than 1 percent earlier, but by the
midsession, the benchmark Hang Seng Index .HSI had fallen 0.7
percent to 23,429.08. The China Enterprises Index of Hong
Kong-listed mainland companies .HSCE, or H shares, declined 1.6
percent to 13,225.94.

Mainboard turnover was HK$40.9 billion (US$5.2 billion),
compared to Monday morning's HK$47.23 billion.

HSBC was the morning's most active stock after it said on
Monday that pretax profit rose 10 percent last year, driven by
buoyant growth in Asia which helped Europe's biggest bank absorb
$17.2 billion in bad debts as the U.S. housing crisis deepened
[ID:LnL03104887].

Mainland lenders led the declines, with China Construction
Bank (0939.HK: Quote, Profile, Research, Stock Buzz) dropping nearly 2 percent to HK$5.71 and
Industrial & Commercial Bank of China (1398.HK: Quote, Profile, Research, Stock Buzz) down 1.5 percent
to HK$5.24.

Ping An slid 2.4 percent to HK$57.35. Its fund raising plan
could raise some 120 billion yuan, making it by far China's
biggest equity refinancing.

Surging zinc and nickel prices, however, lent a shine to
metal plays.

Chinese nickel miner Xinjiang Xinxin Mining Industry Co Ltd
(3833.HK: Quote, Profile, Research, Stock Buzz) vaulted 3.6 percent to HK$7.43. China's top zinc
producer Hunan Nonferrous Metals Corp Ltd (2626.HK: Quote, Profile, Research, Stock Buzz) rose 1
percent to HK$3.99.
(US$1=HK$7.8)
(Editing by Anne Marie Roantree)