Hong Kong shares close up 0.61 pct on oil stocks

By Parvathy Ullatil

HONG KONG, June 6 (Reuters) - Hong Kong shares closed 0.61 percent higher in thin trade on Friday, with oil stocks rising after crude prices posted their biggest ever single-day jump.

U.S. crude futures CLc1 gained $6 in after hours trading on Thursday because of a weakening U.S. dollar, and held at about $128 per barrel in Asian trade on Friday.

Shares in offshore oil producer CNOOC (0883.HK) reacted with a 3.1 percent jump and PetroChina (0857.HK) climbed 1.3 percent.

But the prospect of higher fuel costs sent airline stocks tumbling, with Cathay Pacific Airways (0293.HK) down 3.2 percent and China Southern Airlines (1055.HK) dropping 2.4 percent.

Oil refiner Sinopec Corp (0386.HK), the most actively traded stock of the day, jumped 2.9 percent, on talk of price reforms in petroleum products and speculation that it may privatise or increase its stake in some of its subsidiaries.

"Now that the telecom restructuring is out of the way people are looking for a new theme and there is talk about reforms in the oil industry, particularly the long-discussed changes in the pricing policy for petroleum products," said Peter Pak, vice president, BOCI Research.

China regulates the prices of petroleum products, keeping them artificially low and plunging its refiners into losses.

The Hang Seng Index .HSI closed 146.89 points higher on Friday at 24,402.18.

The rise trimmed the week's losses to 0.53 percent, ahead of the long weekend. The Hong Kong market is closed on Monday for the dragon boat festival.

Turnover on the mainboard fell to its lowest of the week at HK$58.62 billion ($7.52 billion) from HK$63.7 billion on Thursday.

Amid a nervous market, Wah Kwong Maritime Transport Holdings Ltd (0067.HK) withdrew a planned initial public offering in Hong Kong. And the two new listings making their debut on the Hong Kong market on Friday fell below their issue prices.

The China Enterprises Index of locally listed mainland companies .HSCE rose 1.2 percent to 13,513.21, led by a rebound in coal stocks, even as mainland markets slipped ahead of the long weekend.

The Shanghai Composite Index fell 0.66 percent while the turnover in the A-share market shrank to its smallest since December 2006 [nSHA281299].

Yanzhou Coal (1171.HK) surged 3.7 percent, recovering from a two-day slide on worries over government-led price intervention.

Analysts downplayed the impact of the temporary price cut on thermal coal in Yanzhou's home province of Shandong, saying it would cost the company only 15 million yuan.

Other coal stocks also rose, with China Shenhua (1088.HK) gaining 2.1 percent and China Coal Energy (1898.HK) up 1.1 percent.

Index heavyweights China Mobile (0941.HK) and China Life (2628.HK) supported advances in the broad market. China Mobile gained 0.5 percent and China Life was up 1 percent.

New listing Central China (0832.HK) fell 2.9 percent to HK$2.67 from its IPO price of HK$2.75. Pou Sheng International (3813.HK), which also made its debut, was down 14.4 percent at HK$2.61 against its issue price of HK$3.05.

The world's largest bank by market capitalisation, Industrial & Commercial Bank of China (ICBC) (1398.HK) gained 1.4 percent after it 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.

Franshion Properties (China) Ltd (0817.HK) rose 10.4 percent after the firm announced a $1.6 billion deal that will give it more exposure to Chinese hotels and offices.

Franshion, which raised $425 million in an initial public share offering last August, said in a statement it would buy China Jin Mao (Group) Co Ltd, from its parent Sinochem Hong Kong and other Chinese state-owned enterprises. (US$1 =HK$7.80) (Editing by Dominic Whiting) (Reuters Messaging - parvathy.ullatil@thomsonreuters.com; +852 28436415))

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