HK shares seen opening higher on Wall Street lead

HONG KONG, June 6 (Reuters) - Hong Kong shares are expected to open higher on Friday after U.S. retail sales and jobs data beat expectations, quelling fears of recession in world's largest economy.

U.S. shares rose the most in more than a month on Thursday on stronger-than-expected May sales numbers from Wal-Mart and other retailers as well as a surprising fall in jobless claims [ID:nN05403868].

A rebound in oil prices after recent sharp pullbacks will also help oil producers, which have been lagging the broad index, to regain some ground.

"There is a possibility for the Hong Kong market to move higher after the very strong day we had in the U.S. overnight. But investors will be cautious, as we saw from Thursday's thin volumes," said Benjamin Collett, head of hedge fund sales trading at Daiwa Securities SMBC co.

The impending adjustment in the benchmark Hang Seng Index .HSI is likely to weight on the market, with investors keeping away from shares in PCCW (0008.HK) and Cheung Kong Infrastructure (1038.HK) ahead of their removal from the index next week, Collett said.

The benchmark index closed 0.55 percent higher on Thursday in skittish trade, led by a 4.4 percent jump in in oil refiner Sinopec Corp. But turnover fell to HK$63.7 billion ($8.2 billion ) from HK$ 78.91 billion on Wednesday.

STOCKS TO WATCH

* Upstream pure play CNOOC (0883.HK) is expected to recover after falling nearly 5 percent since the begining of June. Oil prices surged on Thursday, gaining over $5 per barrel as the U.S. dollar tumbled against the euro.

* Sinopec Corp (0386.HK) which has been on an upswing owing to retreating oil prices may correct on Friday. Sinopec's subsidiary, Sinopec Shanghai Petrochemical (0338.HK), gained more than 7 percent on Thursday on market talk it may increase prices of its products after a fire damaged Sinopec's Moaming refinery, putting pressure on supplies.

* PCCW and Cheung Kong Holding will be watched ahead of their removal from the Hang Seng Index on Tuesday. The two stocks are being replaced by Aluminum Corp of China (2600.HK) and Tencent (0700.HK).

* The world's largest bank by market capitalisation, Industrial & Commercial Bank of China (ICBC) (1398.HK) (601398.SS) said on Thursday it was aiming to become the world's most profitable lender in less than five years. ICBC is already Asia's most profitable lender. The lender also said it had no plans to privatise its subsidiary ICBC (Asia) which had rallied strongly after the China Merchnats Bank-Wing Lung deal and Citic International Financial Holdings-BBVA deal

* Franshion Properties (China) Ltd (0817.HK) said on Friday it would buy a Chinese high-end real estate development and management firm China Jin Mao (Group) Co Ltd for 11 billion yuan ($1.58 billion), a deal to be settled in cash and by issue of new shares. The proposed share dilution could put pressure on Franshion's share price. ------------------MARKET SNAPSHOT @ 23:54 GMT --------------

INSTRUMENT LAST PCT CHG NET CHG

S&P 500 .SPX 1,404.05 1.95% 26.850

USD/JPY JPY= 105.89 -0.03% -0.030

10-YR US TSY YLD US10YT=RR 4.042 -- -0.002

SPOT GOLD XAU= $878.55 0.14% 1.200

US CRUDE CLc1 $128.25 0.36% 0.440

DOW JONES .DJI 12604.45 1.73% 213.97

ASIA ADRS .BKAS 166.85 1.56% 2.57 ------------------------------------------------------------- > US STOCKS-retailers, oil companies fuel market rally [.N] > Oil posts record $6 gain on weak US dollar [O/R] > FOREX-Trichet rate hike signal sparks broad euro rally [USD/] > TREASURIES-Bonds fall on claims drop, Trichet comments [US/] > Gold ends lower despite oil rally, weak dollar [GOL/

(Reporting by Parvathy Ullatil; Editing by Anne Marie Roantree)

(Reuters Messaging - parvathy.ullatil@thomsonreuters.com; +852 28436415)

(US$1 =HK$7.80)

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