HK stocks seen higher, construction shares eyed

HONG KONG, May 15 (Reuters) - Hong Kong stocks are expected
to rise on Thursday, tracking firmer regional markets after U.S.
economic data eased inflation worries, with construction-related
shares in focus after the earthquake in China.

"Some 200 points on the upside is expected after Wall St
gained, but the (local) market will track the A-share market for
the rest of the day as investors lack a sense of direction," said
Francis Lun, general manager from Fulbright Securities.

Construction and cement-related stocks would be in demand but
trade is expected to remain thin, Lun added.

The benchmark Hang Seng Index .HSI closed down 0.08 percent
down at 25,533.48 points on Wednesday. But the China Enterprises
Index of Hong Kong-listed mainland companies .HSCE, or H
shares, finished 0.02 percent higher.
----------------------MARKET SNAPSHOT @ 2250 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1408.66 0.4% 5.620
USD/JPY JPY= 105.07 0.03% 0.030
10-YR US TSY YLD US10YT=RR 3.9207 -- 0.000
SPOT GOLD XAU= 865 0.16% 1.350
US CRUDE CLc1 124.05 -0.14% -0.170
DOW JONES .DJI 12898.38 0.52% 66.20
-------------------------------------------------------------

FACTORS TO WATCH:
* Nikkei up 0.4 pct, Sony awash with buy order [.T]
* U.S. stocks-Benign inflation, strong results lift Wall St [.N]
* STOCKS NEWS ASIA-Market factors, main events [STXNEWS/ASIA]
* Oil falls on Iran assurance, US distillate build [O/R]
* Yen falls broadly after tame CPI data, stocks rise [USD/]
* For upcoming Hong Kong events, click on [HK/DIARY]
* For Hong Kong press digest, click on [PRESS/HK]

STOCKS TO WATCH:

* Citi upgraded Hutchison Whampoa (0013.HK) to buy from hold,
saying the ports-to-telecom conglomerate is turning the corner as
its 3G business is expected to break even later this year and it
is likely to get an expected bumper contribution from China
property in 2008. It raised Hutchison's target price to HK$90
from HK$82.

* Citigroup raised its target price for Tencent Holdings
(0700.HK) to HK$75 from HK$63, saying the Chinese Internet firm
would continue to be its top pick for 2008 after strong
first-quarter earnings. [ID:nHKG278769] [ID:nHKG293495]

* Aluminum Corp of China Ltd (2600.HK) (601600.SS), the
world's No.4 aluminium maker, said on Thursday that it had taken
over six units of its state-owned parent worth 4.17 billion yuan
($595.5 million). [ID:nSHA296356]

* Shaw Brothers 0080.HK said on Wednesday its controlling
shareholder is in talks to sell its slice of the Hong Kong media
conglomerate led by movie mogul Run Run Shaw, sending its shares
and those of its unit TVB (0511.HK) up 11 percent on bid talk.
Trading in the stocks will resume on Thursday. [ID:nL14156688]

* Cathay Pacific (0293.HK) and Dragonair carried 7.2 percent
more passengers and 8.5 percent more cargo in April as compared
with the same period a year ago.

* Semiconductor Manufacturing International Corp (0981.HK)
said there was no structural or equipment damage to its
facilities in Chengdu and the earthquake did not have any impact
on its other facilities in the mainland. For details please see
here

* Chinese tissue maker Vinda International Holdings Ltd
(3331.HK) said production and operation of its Vinda Paper
(Sichuan) Co Ltd had been temporarily suspended pending
inspection of safety of the factory structure. For detail please
see
here

KEY HK ADR MOVERS (by % change)

China Eastern Air (CEA.N)(0670.HK) +5.6

China Southern Air (ZNH.N)(1055.HK) +4.1

Aluminum China (ACH.N)(2600.HK) +2.7

CNOOC Ltd (CEO.N)(0883.HK) +1.66

Yanzhou (YZC.N)(1171.HK) +1.62

China Unicom (CHU.N)(0762.HK) +0.84
(US$1=HK$7.8)
(Reporting by Donny Kwok; Editing by Anne Marie Roantree)