HK shares seen hovering on interest rate caution

HONG KONG, June 24 (Reuters) - Hong Kong shares are expected to move in a narrow range on Tuesday after a day of lacklusture trade, as cautious investors await the outcome of a Federal Reserve meeting and an expected interest rate hike from Beijing.

The Fed is widely expected to hold interest rates in a decision due on Wednesday, but investors anticipate more cautionary words on inflation and hints on the outlook for rates.

A jump in international crude oil prices is also expected to cap gains as supply disruptions in Nigeria and escalating tensions between Isreal and Iran overshadow Saudi Arabia's promise to hike oil output.

U.S. crude settled well above $136 per barrel on Monday.

"The overseas markets were unchanged and oil prices went higher, so we should have a mixed day in Hong Kong, with the main index continuing to move sideways," said Ben Kwong, COO with KGI Asia.

Kwong expects some momentum in today's trade, as funds take to window dressing ahead of the month end. But the HSI is still expected to move between 22,500 and 23,000.

On Monday, U.S. shares closed little changed as renewed fears over losses at major U.S financial institutions offset gains in energy stocks. [ID:nN23289736]

The Hang Seng Index .HSI closed down 0.13 percent on Monday at 22,714.96, after opening 1.5 percent lower. The main index vacillated between 22,830.43 and 22,384.58 through the session.

STOCKS TO WATCH

* Oil stocks and airlines will be in focus, with international crude oil prices regaining some lost ground. Oil refiner Sinopec Corp (0386.HK), Sinopec Shanghai Petrochemical (0338.HK) and PetroChina (0857.HK) may come under pressure while offshore oil producer CNOOC (0883.HK) is expected to extended Monday's 1.6 percent rally.

* China Oilfield Services Ltd (2883.HK) told the Hong Kong stock exchange it was engaged in on-going discussions on potential business opportunities but no concrete decision had been made based on those talks. The comments came after newspaper reports that it was in talks to buy Norwegian oil-drilling contractor Awilco Offshore ASA in a deal that could be valued at $2 billion.

* Geely Automobile (0175.HK) expects an earnings boost after its parent company injects all its car-making plants into the Hong Kong-listed firm, said the South China Morning Post, quoting Geely chairman Li Shufu.

* China Southern Airlines (1055.HK) has applied for an increase in fuel surcharges to offset expected losses from last Friday's nationwide fuel price hike, The Standard newspaper reported. --------------MARKET SNAP SHOT @ 23:57 GMT ------------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1,318.00 0.01% 0.070 USD/JPY JPY= 107.85 0.00% 0.000 10-YR US TSY YLD US10YT=RR 4.170 -- 0.004 SPOT GOLD XAU= $885.20 0.21% 1.850 US CRUDE CLc1 $137.10 0.26% 0.360 DOW JONES .DJI 11842.36 0.00% -0.33 ASIA ADRS .BKAS 153.14 0.48% 0.73 --------------------------------------------------------------> US STOCKS-Dow, S&P end flat as financials weigh [.N] > Oil rises as supply worries outweigh Saudi boost [O/R] > FOREX-Dollar gains on euro zone gloom, US rate review [USD/] > TREASURIES-Bonds slip ahead of supply, Fed meeting [US/] > Gold ends sharply lower on fund liquidation [GOL/] > SE Asian Stocks-S'pore hits 3-mth low on banks, property [.SO]

(Reporting by Parvathy Ullatil; Editing by )