HK shares seen higher after U.S. mortgage rescue

HONG KONG, Sept 8 (Reuters) - Hong Kong shares are expected to open higher on Monday after the U.S. government seized control of troubled mortgage lenders Fannie Mae (FNM.N) and Freddie Mac (FRE.N) in a major step towards stabilising financial markets.

U.S. stock index futures surged on Sunday, pointing to a sharply higher open when Wall Street opens on Monday, after the federal takeover of the beleaguered firms.

Locally-listed financial stocks are expected to post strong gains today, in line with advances in other regional markets on improved investor confidence.

Hong Kong shares .HSI shed 2.2 percent on Friday, with the main index giving up all the gains made in a stellar 2007 rally as property stocks recorded their biggest single-day falls in six months on a broker downgrade.

STOCKS TO WATCH-

* Hong Kong-based consumer goods exporter Li & Fung Ltd (0494.HK) said it would sell HK$3.9 billion ($500 million) worth of new shares to a wholly-owned unit of Temasek Holdings [TEM.UL], raising capital to fund acquisitions.

The U.S.-focused exporter said late on Sunday that it would sell 168 million new shares, or 4.62 percent of its enlarged share capital, at HK$23.09 per share. This represented a 2.39 percent premium to the closing price of HK$22.55 on Friday.

----------------------MARKET SNAPSHOT @ 2247 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1242.31 0.44% 5.480 USD/JPY JPY= 108.51 -0.42% -0.460 10-YR US TSY YLD US10YT=RR 3.708 -- 0.000 SPOT GOLD XAU= 808.5 0.71% 5.700 US CRUDE CLc1 108.37 2.01% 2.140 DOW JONES .DJI 11220.96 0.29% 32.73 ASIA ADRS .BKAS 129.40 0.97% 1.24 -------------------------------------------------------------

MARKET SUMMARY *Dow, S&P end higher on financials, down for week [ID:nN05263512] *Oil falls $2 to 5-month low on economic gloom [ID:nL5628989] *U.S. dollar falls from 11-month high versus euro [ID:nN05470976] *Treasury yields hit 4-mth low on risk aversion [ID:nT170220]

(Reporting by Parvathy Ullatil; Editing by Jonathan Hopfner)