HK stocks up but gains pared on Shanghai weakness

(For Shanghai market reports, click [.SS])
(Updates to Friday close, adds details)

HONG KONG, May 16 (Reuters) - Hong Kong stocks closed up on
Friday but gains were pared after the Tokyo and Shanghai markets
reversed course to close lower, while equipment maker Dongfang
Electric slid as it detailed damage from the China earthquake.

China's top power generator maker, Dongfang Electric
(1072.HK: Quote, Profile, Research, Stock Buzz), tumbled as much as 20 percent on active selling after
it said the Sichuan earthquake had seriously damaged its
production. The stock ended down 14 percent. [ID:nHKG131349]

Power equipment conglomerate Shanghai Electric (2727.HK: Quote, Profile, Research, Stock Buzz)
jumped more than 6.8 percent on expectations that it might
benefit from stronger order flows after the quake disaster and
Dongfang's production loss.

Shipping stocks were mostly higher after sea freight rates
for raw materials hit a record high on continued strong demand
for natural resources in China and India. [ID:nL15783729]

The benchmark Hang Seng Index .HSI closed up 0.41 percent
at 25,618.86 points, off from the day high of 25,748.33. It
gained 2.25 percent for the week.

The China Enterprises Index of Hong Kong-listed mainland
companies .HSCE, or H shares, finished 1.13 percent higher at
14,185.98.

Mainboard turnover edged down to HK$79.6 billion ($10.20
billion) from HK$80.2 billion on Thursday.

The broader market has been trading within a range and some
brokers believe that the Hong Kong and mainland markets have
largely recovered their balance after China's devastating
earthquake, which killed tens of thousands of people.

"Judging from the current low turnover, retail investors are
not jumping in and institutional investors are switching their
holdings instead of increasing their stakes," said Alex Tang,
research director at Core Pacific-Yamaichi International.

Bargain hunters snapped up PetroChina and Sinopec shares as
they lagged behind the blue chip-index, which has recovered in
the second quarter to trim its loss this year to 7.8 percent.
Refiner PetroChina (0857.HK: Quote, Profile, Research, Stock Buzz) rose 3.4 percent on Friday but
it has fallen 17 percent so far this year on record oil prices,
which inflated its costs. Sinopec (0386.HK: Quote, Profile, Research, Stock Buzz), which has lost about
35 percent of its market value this year, rose 3.1 percent.

China Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz) ended down 2.5 percent at
HK$7.05 after an institutional investor sold 408.5 million shares
at the low end of a price range of HK$7.05 to HK$7.10 per share.

Dry bulk cargo ship operator, Sinotrans (0598.HK: Quote, Profile, Research, Stock Buzz), soared 5.6
percent, its bigger rival China COSCO (1919.HK: Quote, Profile, Research, Stock Buzz) rose 3.1 percent
and China Shipping Development (1138.HK: Quote, Profile, Research, Stock Buzz) gained 1.3 percent.

Container ship operator CSCL (2866.HK: Quote, Profile, Research, Stock Buzz) surged 7.5 percent.

"I guess shipping firms are approaching the last leg of the
recent rally and should trigger profit-taking later on high
valuations," said Francis Lun, general manager at Fulbright
Securities.
Sun Hung Kai Properties (0016.HK: Quote, Profile, Research, Stock Buzz) bucked the positive market
trend to fall 1.7 percent after its chairman filed a suit to
block the firm's directors from removing him, escalating a power
struggle at Hong Kong's largest property developer.
[ID:nHKG322253]

Shares in Hunan Nonferrous Metals Corp (2626.HK: Quote, Profile, Research, Stock Buzz) jumped 16
percent after the company said it planned to pay about A$81.21
million in a takeover bid for Australian mining firm Abra Mining
(AII.AX: Quote, Profile, Research, Stock Buzz). For details please see
here

But analysts pointed out that the company saw record orders
last year and its capacity probably would not be able to grow
fast enough to cater for extra orders.
(US$1=HK$7.8)
(Reporting by Alison Leung; Editing by Anne Marie Roantree and
Keiron Henderson)