HK shares fall to 3-wk lows, resource plays drop

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

By Rita Chang

HONG KONG, March 5 (Reuters) - Hong Kong stocks fell on
Wednesday as heavyweight China Mobile (0941.HK: Quote, Profile, Research, Stock Buzz) dropped amid
further talk of an imminent telco restructuring that could
undermine the cellular operator's dominant position in mainland
China.

Resource shares also fell, pacing declines in commodities,
driving blue chips and Hong Kong-listed shares in mainland
companies to their lowest level since Feb. 11.

"The market is becoming more bearish," said Y.K. Chan,
strategist at Phillip Securities.

"We've tried several times to break the trading range, and
now people are disappointed. Until we have better sentiment, we
won't be doing better. These days, we'll be trading on low
volumes and keeping on the sidelines."

The benchmark Hang Seng Index .HSI had fallen 1 percent to
22,888.90 by lunch. The China Enterprises Index of Hong
Kong-listed mainland companies .HSCE, or H shares, fell 2.1
percent to 12,698.22.

Mainboard turnover came to HK$45.4 billion (US$5.8 billion),
up from Tuesday morning's HK$40.9 billion.

Shares in Cathay Pacific (0293.HK: Quote, Profile, Research, Stock Buzz) bucked the broad market
trend to edge up 0.1 percent to HK$16.22. After the market closed
for lunch, the company posted a 72 percent jump in annual net
profit on surging passenger demand and higher ticket prices.
[nHKF078947].

China Mobile fell 1.1 percent to HK$112.5, while other
telecom stocks advanced on hopes that an industry reshuffle would
pave the way for them to compete more effectively against China's
dominant mobile carrier.

Fixed line provider China Telecom (0728.HK: Quote, Profile, Research, Stock Buzz) gained 1.1
percent to HK$5.62, while its smaller rival China Netcom
(0906.HK: Quote, Profile, Research, Stock Buzz) jumped 4.6 percent to HK$23.70.

China Unicom (0762.HK: Quote, Profile, Research, Stock Buzz) shot up 6.2 percent to HK$16.80.

Oil producer PetroChina Co Ltd (0857.HK: Quote, Profile, Research, Stock Buzz) dropped 1.7 percent
to HK$10.64 and offshore oil specialist CNOOC Ltd (0883.HK: Quote, Profile, Research, Stock Buzz) slid
4.6 percent to HK$11.56, tracking an overnight slide in crude
prices.

Other raw materials stock also fell, with nickel miner Xinxin
Mining (3833.HK: Quote, Profile, Research, Stock Buzz) down 5.7 percent at HK$6.98 following its recent
run.

Coal issues China Shenhua (1088.HK: Quote, Profile, Research, Stock Buzz) ended the morning down
4.2 percent at HK$36.80 and China Coal (1898.HK: Quote, Profile, Research, Stock Buzz) tumbled 6.2
percent to HK$14.88.

Hong Kong Exchanges and Clearing Ltd (0388.HK: Quote, Profile, Research, Stock Buzz) bucked the
trend, edging up 0.4 percent to HK$142.2 before its earnings
announcement due during the lunch break.
(US$1=HK$7.8)
(Editing by Anne Marie Roantree)