HK Hot Stocks:Chinese telcos extend falls, airlines shine
HONG KONG, June 4 (Reuters) - Here are some of the stocks on the move on Wednesday.
As of 0255 GMT, the Hang Seng Index .HSI had extended losses to fall 0.9 percent to 24,164.57.
The China Enterprises Index .HSCE was down 1.4 percent at 13,430.27.
STOCKS ON THE MOVE:
* Shares in Chinese telecom companies added to Tuesday's steep falls as analysts were bearish on the proposed merger between China Unicom (0762.HK) and China Netcom (0906.HK). UBS cut its rating on China Unicom to "neutral" from "buy" and reduced its target price to HK$16.9 from HK$20 as it sees the wireless operator overpaying to take over China Netcom.
China Unicom slumped 3.2 percent after tumbling over 14 percent on Tuesday. China Netcom was down 4.5 percent and China Telecom (0728.HK) gave up 2 percent.
* Hong Kong's largest airline Cathay Pacific Airways (0293.HK) jumped 3.3 percent after global crude oil prices fell more than $3 a barrel on Tuesday after the U.S. Federal Reserve suggested it may not cut interest rates further this year.
* Shares in China's largest air carrier by fleet size, China Southern Airlines (1055.HK), rallied 3.3 percent on the oil price drop and news that its subsidiary, Xiamen Airlines, had launched cross-strait flights to Taiwan at the frequency of one per hour. Earlier flights between the mainland and Taiwan were routed through a third destination, given the strained relations between the two sides.
* China Eastern Airlines (0670.HK) was up 1.5 percent. China Southern and smaller rival China Eastern Airlines are also reported to be cutting down on loss-making long-haul international routes to reduce costs as they grapple with sky-high oil prices [ID:nSHA271014]. Flag carrier Air China (0753.HK) gained 1.2 percent.
* Coal stocks fell as investors used the recent pullback in commodity prices to lock in gains. China Shenhua (1088.HK) dropped 5.3 percent, while Yanzhou Coal (1171.HK) gave up 8.3 percent.
* Small lenders in Hong Kong rose after Spain's second-largest bank, BBVA BBAVA.MC, said it would double its stake in Chinese bank CITIC and its Hong Kong-listed unit Citic International Financial Holdings (CIFH) 0183.HK.
The CIFH deal follows China Merchants Bank's (3968.HK) acquisition of another local lender, Wing Lung Bank 0096.HK, adding to speculation that Wing Hang Bank (0302.HK), Chong Hing Bank (1111.HK) and Dah Sing Banking (2356.HK) may also be talking to potential suitors. Chong Hing was up 2.1 percent while Dah Sing rose 5.6 percent. Wing Hang dipped 0.3 percent after gaining sharply ahead of the CM Bank-Wing Lung deal.
(Reporting by Parvathy Ullatil; Editing by Anne Marie Roantree)
(Reuters Messaging parvathy.ullatil@thomsonreuters.com; +852 28436415)
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