* China stocks slip ahead of key economic data
* HK stocks ease as China telecom plays weigh
* Huaneng jumps after strong earnings, broker upgrade
(Updates to close)
By Donny Kwok, Claire Zhang and Edmund Klamann
HONG KONG/SHANGHAI, Oct 21 (Reuters) - Hong Kong and Shanghai
stocks fell on Wednesday as investors locked in profit ahead of
key economic indicators due for release in China on Thursday and
were waiting for hints of direction from the U.S. dollar.
Hong Kong stocks closed down 0.3 percent on Wednesday,
retreating from a 14-month high after two straight gaining
sessions. Telecommunications plays weighed on a weak earnings
outlook but demand for assets plays slowed the slide.
China Mobile (0941.HK), the world's largest mobile carrier,
fell 1.9 percent to HK$77.25. China Telecom (0728.HK), the
country's top fixed-line telephone company, lost 2.62 percent to
HK$3.72 after posting a drop in quarterly profit.
"The market underwent consolidation, not a correction, with
liquidity still abundant," said Ben Kwong, chief operating
officer at KGI Asia.
"A steady dollar kept players away and investors were
sidelined for fresh incentives before betting on further upside,"
Kwong said. "Sentiment-wise, things are still positive."
The benchmark Hang Seng Index .HSI eased 66.85 points to
22,318.11. Turnover fell to HK$67.71 billion ($8.7 billion), from
Tuesday's HK$74.18 billion.
The China Enterprises Index .HSCE of top locally listed
mainland Chinese stocks edged down 0.29 percent to 13,001.59.
China asset plays stayed firm with developer China Resources
Land (1109.HK) up 4.06 percent at HK$20. China Overseas Land
(0688.HK) rose 2 percent.
Brokers said asset revaluations due to underlying weak
sentiment on the U.S. dollar had made China property stocks
appealing, while power counters, which are sensitive to mainland
economic policy changes, were in demand partly as a hedge against
risk exposure to potential power tariff changes.
Huaneng Power (0902.HK), China's largest electricity
provider, surged to as high as HK$5.63 before ending at HK$5.56,
still up 7.54 percent from the previous session.
Huaneng reported that it had swung to a net profit in the
third-quarter because of increased output from new operating
units, two tariff rises in the second half of 2008 and lower coal
costs. A Deutsche Bank research note on Wednesday upgraded
Huaneng to "buy" from "hold" with target price at HK$6.30.
Guangzhou Investment (0123.HK) jumped 28.26 percent to end at
HK$1.77 after it announced a plan to separate its toll road
business and focus on property business to capitalise on the
robust growth of the Chinese property market.
SHANGHAI DOWN AHEAD OF DATA
China's key stock index edged down 0.45 percent on Wednesday,
retreating from a two-month intraday high with metals shares soft
as profit-taking emerged ahead of key economic data due for
release on Thursday.
Analysts said the index was in need of consolidation after
breaking through key chart resistance this week on expectations
that forthcoming third-quarter GDP growth data would be strong.
The Shanghai Composite Index .SSEC ended at 3,070.589
points after hitting a two-month intraday high of 3,105.514. It
has gained more than 10 percent in the nearly two weeks since the
market returned from the week-long National Day holiday.
"The index has risen fast, reflecting upbeat expectations
about economic data due for release on Thursday. It may move
lower to test 3,000, to see if it can offer strong support," said
Chen Huiqin, senior analyst at Huatai Securities in Nanjing.
She added that the index could climb further to 3,200 points
but had limited potential on the upside because of worries about
possible monetary tightening.
Guo Yanling, head of research at Shanghai Securities, added:
"The economic data due for release tomorrow will be strong. This
is clear and expected. Investors are eyeing whether the data can
be even better, although a surprise seems unlikely."
Comments by central bank Vice-Governor Ma Delun late on
Tuesday, however, highlighted inflation risks when he said that a
weak dollar could cause liquidity to flood into China and pose an
inflation threat. [ID:nPEK199761]
Losing Shanghai A shares outnumbered gainers by 625 to 258,
while turnover slipped to 155 billion yuan ($22.71 billion) from
Tuesday's one-month high of 167 billion yuan.
Shandong Gold (600547.SS) sank 3.07 percent to 69.42 yuan
after gold fell below $1,060 per ounce on Tuesday, as the dollar
rebounded from its weakest level in 14 months versus the euro.
[ID:nLK335899]
Minsheng Bank (600016.SS), China's first listed non-state
lender, rose 1.57 percent to 7.75 yuan after saying it would earn
a net profit of at least 11 billion yuan in 2009. [ID:nSHA236305]
Huaneng Power International (600011.SS), China's largest
electricity provider, advanced 1.81 percent to 7.89 yuan after
saying net profit in the third quarter grew nearly four-fold as
new facilities went into production.
(Editing by Chris Lewis)
