HK shares seen stable on Ping An earnings, oil

HONG KONG, Aug 18 (Reuters) - Hong Kong stocks are seen hovering on Monday with a better-than-expected first half performance from China's second largest insurer and lower oil prices helping arrest the downtrend in the market.

Ping An Insurance (Group) Co (2318.HK), China's second-largest life insurer, posted a 39.5 percent decline in second-quarter profit on Friday as a drop in investment income, due to a sharp fall in the stock market, offset growth in premiums.

But its 9.49 billion yuan net profit in the first half beat most analyst expectations. JP Morgan upgraded the stock to overweight from neutral, saying it will outperform its biggest rival China Life in the current quarter owing to better premium quality.

The Dow and S&P 500 rose on Friday, as sinking commodity prices raised hopes of a consumer spending recovery, helping push shares of retailers higher.

A rally in the U.S. dollar on fears about slowdowns in economies outside the United States pushed the price of oil down to a 15-week low. Oil was moving higher in Asia, however, on Monday as investors eyed a potential threat to production in the Gulf of Mexico from a tropical storm.

Hong Kong shares fell 1.1 percent on Friday, with the main index closing at 21,160.58 -- its lowest level in nearly five months, after a spate of disappointing earnings announcements triggered analyst downgrades.

"With the U.S markets moving higher in every session, Hong Kong is likely to stabilise now. The main index should move between 21,100 and 21,300 today," said Conita Hung, head of equity markets with Delta Asia Financial Group.

The blue chip Hang Seng Index .HSI has given up more than 7 percent since end-July, compared with a 2.5 percent gain on the Dow Jones industrial average .DJI in the same period.

STOCKS TO WATCH-

Separately, the mainland insurance regulator called on insurers to cut their exposure to the stock market amid uncertian economic outlook, reported the South China Morning Post citing a source who attended a work conference of the China Insurance Regulatory Commission.

Due to China's tumbling local A-share market this year, Ping An reported 9.3 billion yuan in total investment income in the first half of 2008, down 64 percent from the same period last year, due to an impairment loss of 1.6 billion yuan.

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* Foxconn International Holdings Ltd (2038.HK), the world's largest contract cell phone maker said it expected net profit for the first half of the year to show a significant decline compared to the year ago period, amid higher costs and income tax expenses. [ID:nHKG29182]. For statement please see here

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* Datang International (0991.HK) said the China Securities Regulatory Commission had approved its application for the issue of corporate bonds on the mainland in an aggregate principal amount of up to 6 billion yuan with the issue size of the first tranche of bonds amounting to 3 billion yuan. For statement please see here ---------------------MARKET SNAPSHOT @ 23:09 GMT----------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1,298.20 0.41% 5.270 USD/JPY JPY= 110.33 -0.16% -0.180 10-YR US TSY YLD US10YT=RR 3.848 -- 0.000 SPOT GOLD XAU= $791.65 0.78% 6.150 US CRUDE CLc1 $113.67 -0.09% -0.100 DOW JONES .DJI 11659.90 0.38% 43.97 ASIA ADRS .BKAS 137.18 -0.72% -1.00 ---------------------------------------------------------------- > SE Asian Stocks-Lower as oil slips, Vietnam at mth-high [.SO] > US STOCKS-Dow, S&P 500 rise as lower oil lifts retailers [.N] > Oil falls below $114 on global demand worries [O/R] > FOREX-Dollar posts 5th weekly gain verus euro [USD/] > TREASURIES-Yields at 1-mo low as inflation fears recede [US/] > Gold falls below $800 for first time since Dec [GOL/]

(Reporting by Parvathy Ullatil; editing by Keiron Henderson)