HK blue chips up as HSBC boosts but China plays down

(For Shanghai stock market reports, click [.SS])
(Adds Monday midday close, details)

By Rita Chang

HONG KONG, Feb 25 (Reuters) - Hong Kong blue chips rose 0.2
percent on Monday as global bank HSBC Holdings plc (0005.HK: Quote, Profile, Research, Stock Buzz) led
the way on news that banks were near an agreement to bail out
bond insurer Ambac Financial in a deal that could stem further
losses in credit markets.

But bourse operator Hong Kong Exchanges and Clearing Ltd
(HKEx) (0388.HK: Quote, Profile, Research, Stock Buzz) weighed on the market again, looking set for its
fourth straight losing session, as investors shunned the stock
amid a decline in this year's turnover.

Meanwhile, tumbling stock markets in the mainland unnerved
investors, driving China plays into negative territory.

"We are at a crossroads. We have better Western markets but
weaker mainland markets. It's hard to tell what direction we're
headed," said Y.K. Chan, strategist at Phillip Securities.

The benchmark Hang Seng Index .HSI had risen to 23,349.47
by lunch. The China Enterprises Index of Hong Kong-listed
mainland companies .HSCE, or H shares, fell 0.2 percent to
13,315.07.

Mainboard turnover was a meager HK$34.6 billion (US$4.4
billion), compared with Friday morning's HK$39.9 billion.

HSBC was on course to log its third-straight gaining session,
rising 1.8 percent to HK$116.7.

Hong Kong Exchanges, the morning's most active stock after
HSBC, slumped a further 3.1 percent to HK$142.30.

Shipping plays rebounded after last week's decline, with dry
bulk shipper Pacific Basin (2343.HK: Quote, Profile, Research, Stock Buzz) up 5.6 percent to HK$12.14.
Sinotrans Shipping (0368.HK: Quote, Profile, Research, Stock Buzz) rose 3 percent to HK$5.13.

Steel plays gained after Baoshan Iron and Steel Co
(600019.SS: Quote, Profile, Research, Stock Buzz) said on Monday it would hike major steel product
prices by 17 to 20 percent in the second quarter of 2008 compared
with the first quarter [ID:nBJD000246].

Angang Steel (0347.HK: Quote, Profile, Research, Stock Buzz) surged 4.8 percent to HK$19.78 and
Maanshan Iron & Steel (0323.HK: Quote, Profile, Research, Stock Buzz) jumped 4.1 percent to HK$4.86.

China Unicom (0762.HK: Quote, Profile, Research, Stock Buzz) was the morning's worst performing
blue chip, as shares eased following their recent run on industry
restructuring hopes. Shares in the cellular operator slid 4.8
percent to HK$17.38.
(US$1=HK$7.8)