* Lenovo, Alibaba sink after share sales
* Auto stocks outperform in China on strong Aug sales
* Metal stocks surge on firm commodity prices
By Parvathy Ullatil and Claire Zhang
HONG KONG/SHANGHAI, Sept 9 (Reuters) - Hong Kong and China
shares pulled back on Wednesday after long winning streaks
reignited concerns that stock valuations have run ahead of a
potential recovery in corporate earnings.
Hong Kong shares shed 1 percent, weighed down by large
share sales in Lenovo (0992.HK) and Alibaba.com (1688.HK), with
more investors expected to take profits on the market's recent
rally.
China's benchmark stock index slipped 0.3 percent by midday
but auto shares outperformed for the second day after China's
passenger car sales in August jumped 90 percent from a year
earlier. [ID:nSHA115648]
SHARE PLACEMENTS WEIGH
By midday, the benchmark Hang Seng Index .HSI was 199.47
points lower at 20,870.34 with shares worth HK$36.4 billion
changing hands.
The gauge had tacked on 1,500 points in a four-session
winning stretch, lifting the main index above 21,000 points.
The China Enterprises Index .HSCE, which represents top
locally listed mainland Chinese stocks, was down 1.4 percent.
Geely Automotive (0175.HK) rose nearly 4 percent before
paring some of the gains after the carmaker posted a strong
surge in first-half earnings after increasing its stake in its
associate companies.
Seperately, Geely's parent will bid for Ford Motor-owned
(F.N) carmaker Volvo Car Corp with a local-government backed
investment firm, a Geely executive said on Wednesday.
"On the assumption that the parent company successfully
acquires Volvo cars, it will fine tune the product line and
technology until Volvo becomes profitable and then inject the
assets into the listed company," said Vivien Chan, auto analyst
with Sinopac Securities Corp
"It is definitely a long term positive for the stock."
Alibaba.com fell 5.3 percent to HK$20.50 after Jack Ma,
chairman and founder of China's largest business-to-business
web marketplace, sold 13 million shares for about $35 million.
Lenovo slid 5.5 percent to HK$3.46 after a major
shareholder in the world's No. 4 PC maker sold 292 million
shares at a discount of 2.5-3 percent from Tuesday's close. It
was the most heavily traded stock of the morning.
AUTO SHARES OUTPERFORM
The Shanghai Composite Index .SSEC, which is under
profit-taking pressure after six straight days of rises, ended
the morning at 2,920.76 points.
Through Tuesday, it had rebounded more than 10 percent from
its Sept 1 intraday low, with policy support from Beijing
offsetting negative factors including heavy new share supplies.
In the latest sign of government support for the market,
the official Shanghai Securities News reported that the China
Securities Regulatory Commission was slowing the pace of
approvals for initial public offerings (IPO).
Chinese banks made about 370 billion yuan ($54.2 billion)
in new local currency loans in August, more than 356 billion in
July and topping market expectations, two sources who have seen
the official data told Reuters late on Tuesday. [ID:nSP495007]
"Investors had expected worse," said Qian Xiangjing, senior
analyst at CITIC-Kington Securities in Hanzhou. "The index may
have the opportunity to test the key 3,000-point level in
coming days."
That would mark a reverse of the trend in August when the
index plunged 22 percent amid worries including heavy share
supplies and shrinking lending, though some corrections may
also occur while the index is heading for the psychologically
important level.
SAIC Motor (600104.SS) rose 1.8 percent to 20.51 yuan after
Reuters reported that it was considering taking a passive stake
in Saab Automobile [GM.UL] by teaming with luxury sportscar
maker Koenigsegg, a source familiar with the matter said late
on Tuesday. [ID:nSHA123391]
Metal shares shone as a globally weak dollar helped push up
commodity prices around the the world. Western Mining
(601168.SS) rose 3.8 percent to 14.49 yuan and Jiangxi Copper
(600362.SS) added 5 percent to 39.62 yuan.
Brokerage shares jumped, partly on media reports that China
may release draft rules for foreign companies to float shares
in the Shanghai Stock Exchange. Sinolink Securities (600109.SS)
jumped 8 percent to 21.24 yuan.
(Editing by Jacqueline Wong & Kim Coghill)
