HSBC leads HK blue chips higher, steel plays jump

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

By Rita Chang

HONG KONG, Feb 26 (Reuters) - Hong Kong blue chips rose on
Tuesday as HSBC Holdings plc (0005.HK: Quote, Profile, Research, Stock Buzz) jumped after Standard &
Poor's removed a threat to downgrade the ratings of bond
insurers, easing concerns about subprime-related losses at the
biggest banks.

Steel plays gained further momentum after China's largest
steelmaker, Baosteel, said it would raise major steel product
prices by up to 20 percent [ID:nBJD000246].

Chinese names rebounded a day after taking hits from sinking
mainland stock markets, although they eased in late morning trade
after China's benchmark stock index .SSEC headed into negative
territory.

The prospect of huge share sales in Shanghai has spooked
investors there, despite warnings by regulators against
large-scale fundraisings.

"There's a lot of liquidity problems and that will continue,"
said Antony Mak, sales director at DBS Vickers, of the mainland
stock market. "There are no concrete measures now (against
fundraising), so the selling pressure is still strong."

Trade was thin again as investors saw no clear trend in the
market. The benchmark Hang Seng Index .HSI had risen 1.1
percent to 23,529.06 by lunch on mainboard turnover of HK$39.0
billion (US$5.0 billion), compared to Monday morning's HK$34.6
billion.

The China Enterprises Index of Hong Kong-listed mainland
companies .HSCE, or H shares, gained 0.4 percent to 13,257.12.

HSBC, the morning's most active stock, rose nearly 2 percent
to HK$118.70, on course to log a four-session gaining streak.

Angang Steel (0347.HK: Quote, Profile, Research, Stock Buzz) led the resource stocks in heavy trade
to rally more than 7 percent at one point. Its shares ended the
morning up 4.4 percent at HK$20.85. Maanshan Iron & Steel
(0323.HK: Quote, Profile, Research, Stock Buzz) gained 1.4 percent to HK$4.95.

Among the Chinese names leading the recovery, China Unicom
(0762.HK: Quote, Profile, Research, Stock Buzz) climbed 2.8 percent to HK$17.88. Its Shanghai-listed
affiliate, China United Telecommunications Co (Unicom)
(600050.SS: Quote, Profile, Research, Stock Buzz), said on Tuesday it had no plans to raise funds from
the stock market after talk of a planned share sale sent its
shares sharply lower [ID:nSHA26293].

Mainland financials also climbed. China Life (2628.HK: Quote, Profile, Research, Stock Buzz)
settled the morning at HK$29.40, up 1 percent. China Construction
Bank (0939.HK: Quote, Profile, Research, Stock Buzz) posted a 1.6 percent gain to HK$5.6.

Ping An Insurance (2318.HK: Quote, Profile, Research, Stock Buzz) rose 1.7 percent to HK$56.5.
China's second-largest life insurer said it would prudently
consider the size and timing of a planned multi-billion dollar
share sale after the country's securities watchdog warned
companies against big share sales, the Shanghai Securities News
reported on Tuesday [ID:nSHA29793].
(US$1=HK$7.8)
(Editing by Anne Marie Roantree)