HK shares expected to open lower on US concerns
HONG KONG, June 19 (Reuters) - Hong Kong shares are expected to open lower on Thursday, weighed down by concern over a weakening U.S. economy and high oil prices.
Shares in the city climbed 1.2 percent on Wednesday on the back of strong gains in mainland stocks, but analysts expected the rally to be short-lived.
"After the stamp duty cuts in the mainland earlier this year, the government is not likely to take another big measure to rescue the market. So, in the short term, we still have to deal with the policy risk," said Mona Chung, fund manger with Daiwa Asset Management.
Overnight, the Dow .DJI hit its lowest level in three months as worries about a weak economy compounded by credit sector concerns dragged down shares in banks, autos and transportation companies. [ID:nN18441526]
Adding to the gloom, delivery company FedEx corp (FDX.N), which is closely watched by Wall Street as a proxy for U.S. business activity, forecast dismal profits as rising fuel could sap demand.
Oil prices rose overnight, to $136.44 a barrel, with a strike threat by workers in producer nation Nigeria stoking supply concerns [ID:nSP56607]. Climbing oil prices will put the focus back on airlines and refinery companies. The Hang Seng Index .HSI closed on Wednesday 1.2 percent higher at 23,325.80, spurred by a surprisingly strong technical rebound in mainland markets and a 7.8 percent surge in oil refiner Sinopec Corp on speculation of a product price hike in the near term.
STOCKS TO WATCH
* Ping An Insurance (Group) Company of China Ltd (2318.HK) (601318.SS) said its insurance premium rose 30.7 percent in the first five months of 2008.
* Mainland steelmakers may come under pressure today after the China Iron and Steel Association (CISA) warned of heavy financial losses unless they curb spot iron ore imports. The warning came ahead of the month-end deadline for iron ore price talks with Australian miners amid worries that rampant imports have given the miners an upper hand. [ID:nSP24929]
* CITIC Pacific's A$5.2 billion iron ore project in Australia would start output in early 2010, later than estimated, said the South China Morning Post, citing Dan Tenardi, COO of Citic Pacific Mining unit.
------------- MARKET SNAPSHOT @ 23:17 GMT ------------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1,337.81 -0.97% -13.120
USD/JPY JPY= 107.82 0.01% 0.010
10-YR US TSY YLD US10YT=RR 4.142 -- 0.000
SPOT GOLD XAU= $941.35 0.16% 1.400
US CRUDE CLc1 $136.18 -0.37% -0.500
DOW JONES .DJI 12029.06 -1.08% -131.24
ASIA ADRS .BKAS 158.32 -0.62% -0.99
------------------------------------------------------------- > US STOCKS-Bank and economic fears drive Dow to 3-month low [.N] > Oil rises on Nigeria strike threat [O/R] > FOREX-Dollar edges lower as trades rethink rate hike [USD/] > TREASURIES-Bonds rise with safe-haven bid as stocks fall [US/] > Gold steady as traders eye dollar, oil [GOL/] > SE Asian Stocks-Malaysia leads losses as politics weigh [.SO] (Reporting by Parvathy Ullatil; Eediting by Anne Marie Roantree)
