HK shares seen lower on Wall St. losses

HONG KONG, Aug 20 (Reuters) - Hong Kong shares are seen heading south on Wednesday from their lowest close in a year, hit by a second losing session on Wall Street as credit worries continue to haunt local stocks and mainland markets.

"The market should open lower following the overseas weakness but it could stablise if losses in Asia Pacific markets narrow," said Patrick Yiu, associate director of CASH Asset Management. The Hang Seng Index .HSI should test a downside at 20,200 to 20,000 in the medium term and could take a breather thereafter since the market has been oversold, Yiu said. Brokers said power producers are likely to be in demand after a power tariff hike on the mainland. China is raising on-grid power tariffs for thermal generators by 0.02 yuan ($0.291) per kilowatt hour, or about 5 percent, the second rise in less than two months, the government said on Tuesday, as Beijing seeks to ease the worst power crisis in four years.

Investors are still looking at Beijing for any possible relaxation of macroeconomic policy, Yiu said.

Hong Kong shares fell 2.1 percent to close at a new one-year low on Tuesday, The Hang Seng Index .HSI closed down 446.30 points at 20,484.37.

STOCKS TO WATCH-

* Tsingtao Brewery Co Ltd (0168.HK), China's best-known beer brand, posted a 41.9 percent rise in first-half profit to 381.13 million yuan ($55.51 million) versus 268.66 million yuan a year earlier, despite soaring raw material prices. Merrill Lynch later upgraded Tsingtao (600600.SS) to buy from underperform after the better-than-expected interim results.

* ZTE (0763.HK) said on Tuesday the outcome of a CDMA equipment tender by China Telecom had yet to be announced, denying speculation that Huawei had snatched 70 percent of the orders, leaving ZTE and Alcatel Shanghai Bell only 30 percent. For statement please see here * China National Building Material Co Ltd (3323.HK) said late on Tuesday it expected its profit for the first half of 2008 to increase substantially from last year thanks to an increase in revenue from cement and engineering services. For statement please see here

* China Unicom (0762.HK) said its aggregated number of GSM cellular service subscribers increased to 128.551 million in July from 127.599 million in June, while CDMA subscribers decreased to 42.756 million from 43.169 million over the same period. For details please see here

* Chinese property firm Shenzhen Investment Ltd (0604.HK) warned of a substantial decline in first-half profit due to declining property price and transaction volume under China's credit tightening measures. For statement please see here ----------------------MARKET SNAPSHOT @ 2318 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1266.69 -0.93 -11.91 USD/JPY JPY= 109.62 -0.40 -- 10-YR US TSY YLD US10YT=RR 3.8423 -- -- SPOT GOLD XAU= 814.10 -0.75% -6.000 US CRUDE CLc1 114.95 -- 0.42 DOW JONES .DJI 11348.55 -1.14% -130.84 ASIA ADRS .BKAS 134.78 -1.45% -1.98 ------------------------------------------------------------- SE Asian Stocks-Markets hit fresh lows on credit fears [.SO] US STOCKS-Fannie, Freddie fears, inflation slam Wall St [.N] Oil rises over $114 as dollar falls [O/R] FOREX-Profit-taking, weak stocks drag US dollar lower [USD/] Long-dated bonds fall as agency sale draws buyers [US/] Gold ends up, weak dollar fuels commodities rally [GOL/] (US$1=HK$7.8) (Reporting by Alison Leung and Donny Kwok; editing by Jonathan Hopfner)