HK stocks seen up but oil, gold shares may fall

HONG KONG, April 25 (Reuters) - Hong Kong stocks are expected
to move higher on Friday on overseas gains and the strength of
China markets, but lower oil and gold prices could trigger
profit-taking in related counters.

"The blue-chip index should test the 26,000 level today as
Chinese stocks are likely to continue to rally after Beijing cut
the trading tax," said Conita Hung head of research at Delta
Asia.

Shanghai stocks .SSEC, which posted their biggest one-day
rally in more than six years on Thursday, are expected to rise
further, brokers said.

"It's a policy market. The central government answered
investors' prayers and played Santa Claus," said Francis Lun,
general manager at Fulbright Securities.

He was referring to Beijing's recent moves earlier this week
to restrict sales of shares freed up by the expiry of lock-up
periods and cut the share trading tax to 0.1 percent from 0.3
percent.

"The U.S. and Japanese markets were also higher so Hong Kong
stocks should rise about 200 points before a possible retreat
next week," he added.

But a drop in oil prices overnight to about $116 could hurt
Chinese crude producers, such as CNOOC (0883.HK: Quote, Profile, Research, Stock Buzz), whose ADRs
dropped 6 percent on Thursday, brokers said.

The benchmark Hang Seng Index .HSI rose 1.6 percent to a
three-month closing high of 25,680.78 on Thursday. The China
Enterprises Index of Hong Kong-listed companies .HSCE, or H
shares, finished up 4.2 percent.

STOCKS TO WATCH:

* Brilliance China Automotive Holdings (1114.HK: Quote, Profile, Research, Stock Buzz) and BMW's
(BMWG.DE: Quote, Profile, Research, Stock Buzz) China joint venture plan to nearly triple capacity by
2010 to meet robust demand in the world's second largest auto
market. For details please read [ID:nSHA351094]

* China Railway Group (0390.HK: Quote, Profile, Research, Stock Buzz) said its 2007 net profit rose
18 percent to 2.42 billion yuan. For full statement please read
here

* China High Speed Transmission Equipment Group (0658.HK: Quote, Profile, Research, Stock Buzz)
said it would issue US$286 million worth of yuan denominated zero
coupon bonds due 2011 which are convertible into 125.19 million
new shares, or about 9.1 percent of the enlarged share capital,
at an initial conversion price of HK$17.78 a share. For detail
please see
here

* Air China (0753.HK: Quote, Profile, Research, Stock Buzz) said its net profit for first quarter
of 2008 jumped 147 percent to 1.04 billion yuan. For details
please see
here

* Pacific Basin Shipping Ltd (2343.HK: Quote, Profile, Research, Stock Buzz) said it believe that
the dry bulk market is set for another very robust year. The
average freight rate for its contracts signed for the year, which
represented 67 percent of its handysize ship capacity, rose 23
percent to US$28,500 per revenue day from a year ago.
For details please see
here

FACTORS TO WATCH:
* Nikkei opens up, may hover for corporate results [.T]
* U.S. financial stocks up, data point to resilient economy [.N]
* Asian energy stocks may drop after crude tumbles [STXNEWS/AS]
* U.S. crude oil falls as dollar strengthens [O/R]
* US Dollar gains on economic data; euro slides [USD/]
* For upcoming Hong Kong events, click on [HK/DIARY]
* For Hong Kong press digest, click on [PRESS/HK]

KEY HK ADR MOVERS (by % change)

APT Satellite (ATS.N: Quote, Profile, Research, Stock Buzz)(1045.HK: Quote, Profile, Research, Stock Buzz) +5.00

China Eastern Air (CEA.N: Quote, Profile, Research, Stock Buzz)(0670.HK: Quote, Profile, Research, Stock Buzz) +4.30

China Life (LFC.N: Quote, Profile, Research, Stock Buzz)(2628.HK: Quote, Profile, Research, Stock Buzz) +4.07

China Southern Air (ZNH.N: Quote, Profile, Research, Stock Buzz)(1055.HK: Quote, Profile, Research, Stock Buzz) -0.99

China Telecom (CHA.N: Quote, Profile, Research, Stock Buzz)(0728.HK: Quote, Profile, Research, Stock Buzz) -1.53

CNOOC Ltd (CEO.N: Quote, Profile, Research, Stock Buzz)(0883.HK: Quote, Profile, Research, Stock Buzz) -6.01

(US$1=HK$7.8)
(Reporting by Alison Leung; Editing by Anne Marie Roantree)