HK shares seen down on commodity, financial losses
HONG KONG, Aug 5 (Reuters) - Hong Kong shares will come under further selling pressure on Tuesday, with commodity stocks set to take a beating on retreating oil prices and financial stocks likely to slip on HSBC's less-than-stellar first half earnings.
U.S. stocks fell on Monday as shares of energy and commodity-related companies tumbled on falling oil and metals prices and investors worried the housing slump could fuel further losses at financial companies.
Oil closed 3 percent lower on Monday after briefly cracking the $120 per barrel support level and dragged down other commodity prices, partly on concerns a global slowdown would blunt demand.
Financial stocks will come into focus after HSBC (HSBA.L) (0005.HK) reported a 28 percent drop in first-half profit as it took a $14 billion hit from bad debts on U.S. home loans and asset write-downs.
"HSBC results were at the lower end of the market expectations and the share has run up quite a bit in recent times on rumours that the Chinese sovereign fund is buying a stake, so we should see some selling pressure there today," said Ben Kwong, COO of KGI Asia.
Europe's largest bank said on Monday it was still too soon to say whether bad U.S. housing debts had peaked in the first half of the year, despite a slower rate of deterioration.
Also on Monday, Hang Seng Bank (0011.HK), a unit of global lender HSBC Holdings, posted a smaller-than-expected 2.2 percent rise in first-half earnings, with interest margins and fee income driving growth.
Hong Kong shares slid 1.5 percent to 22,514.92 on Monday in thin turnover, with bleak jobs data from the U.S. intensifying recession worries and higher oil prices expected to further erode company profits.
KGI's Kwong expects the HSI to find support at the 22,000 level today.
STOCKS TO WATCH- * Industrial and Commercial Bank of China (Asia) Ltd (0349.HK) said on Monday it would buy HK$1.59 billion ($203.8 million) worth of loans from its controlling shareholder in a move to expand its loans portfolio. For details please see here
* Denway Motors Ltd (0203.HK) said on Monday there were no plans to delist its shares from the Hong Kong Stock Exchange, and would not confirm the accuracy of a South China Morning Post report that cited sources as saying the company may be delisted from the Hong Kong bourse after the dual listing of parent Guangzhou Automobile Group Co Ltd. For a statement please see here
------------ --MARKET SNAPSHOT @ 23:59 GMT ------------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1,249.01 -0.9% -11.300
USD/JPY JPY= 108.20 0.01% 0.010
10-YR US TSY YLD US10YT=RR 3.972 -- 0.002
SPOT GOLD XAU= $893.40 -0.03% -0.250
US CRUDE CLc1 $120.61 -0.66% -0.800
DOW JONES .DJI 11284.15 -0.37% -42.17
ASIA ADRS .BKAS 137.87 -2.57% -3.64
------------------------------------------------------------- > SEA Stocks-End down on global growth worries [.SO] > US STOCK-Financials, energy shares weigh on Wall St [.N] > Oil falls to 3-month low as OPEC output rises [O/R] > FOREX-Tumbling on oil price, upbeat US data lift dollar [USD/] > TREASURIES-Prices slip before Fed meeting, new supply [US/] > Gold drops more than 1 pct as oil tumbles [GOL/]
(Reporting by Parvathy Ullatil; Editing by Jonathan Hopfner)
