HK shares gain as resource stocks storm higher

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

By Rita Chang

HONG KONG, Feb 21 (Reuters) - Hong Kong stocks climbed 1.4
percent on Thursday, as rate cut hopes rose after minutes from
the Federal Reserve's last rate-setting meeting suggested it
would keep cutting rates to keep the U.S. economy out of a
recession.

Resource stocks were again the morning's top stars after gold
and oil prices set new peaks.

But Hong Kong Exchanges and Clearing (0388.HK: Quote, Profile, Research, Stock Buzz), the morning's
most active stock, declined amid the recent slump in turnover.
The stock is now trading below HK$155.4, the average price paid
by the Hong Kong government last year when it raised stakes in
the bourse to 5.88 percent.

"Turnover has been slow the last two weeks," said Kingston
Lin, associate director at Prudential Brokerage. "People don't
want to buy. They just want to wait and see."

The benchmark Hang Seng Index .HSI had risen 1.4 percent to
23,931.05 by lunch on mainboard turnover of HK$41.2 billion
(US$5.3 billion), compared to Wednesday morning's HK$49.5
billion.

The China Enterprises Index of Hong Kong-listed mainland
companies .HSCE gained 1.5 percent to 13,755.12.

Lin said if the Chinese domestic stock markets got a bounce
in the afternoon, Hong Kong shares may tip over 24,000 points,
currently the resistance level.

Resource shares rose further a day after spot gold <XAU=> hit
an all-time high and crude oil CLc1 set a new peak after
topping $101 a barrel.

Lingbao Gold (3330.HK: Quote, Profile, Research, Stock Buzz) leapt a further 2.1 percent to HK$4.77
and rival Zijin Mining (2899.HK: Quote, Profile, Research, Stock Buzz) advanced 3.2 percent to
HK$10.24.

Jiangxi Copper (0358.HK: Quote, Profile, Research, Stock Buzz) jumped 5.7 percent to HK$18.16.
Goldman Sachs upgraded China's top copper producer to buy from
sell on lower smelting loss, and raised its 12-month target price
to HK$24 from HK$14 [ID:nHKG329393].

Oil producers PetroChina Co Ltd (0857.HK: Quote, Profile, Research, Stock Buzz) climbed nearly 3
percent to HK$12.04, while CNOOC Ltd (0883.HK: Quote, Profile, Research, Stock Buzz) rose nearly 2
percent to HK$13.02.

Aluminum Corp of China (Chalco) (2600.HK: Quote, Profile, Research, Stock Buzz), the country's top
alumina producer, shot up 5.8 percent to HK$15. Goldman Sachs
said in a report dated Thursday that aluminum prices had rallied
to new highs on power-related supply shortages and the aluminum
market was poised to turn to potential shortage from surplus.

HKEx, which fell nearly 3 percent at one point, ended the
morning at HK$154.8, down 1.7 percent.

PC maker Lenovo Group (0992.HK: Quote, Profile, Research, Stock Buzz) leapt 2.3 percent to HK$5.33,
boosted by Hewlett Packard Co's (HPQ.N: Quote, Profile, Research, Stock Buzz) upbeat profit forecast.

Higher crude prices hit some transport stocks. Cathay Pacific
Airways (0293.HK: Quote, Profile, Research, Stock Buzz) fell almost 1 percent to HK$16.40. Among
mainland carriers, China Eastern Airlines (0670.HK: Quote, Profile, Research, Stock Buzz) declined 1.7
percent to HK$5.32 and China Southern Air (1055.HK: Quote, Profile, Research, Stock Buzz) dropped 1.6
percent to HK$7.58.
(US$1=HK$7.8)
(Editing by Anne Marie Roantree)