HK shares end down 4.3 pct; Ping An tumbles, BYD up

* BYD soars 42 percent on Buffett's investment

* Ping An falls 10.5 pct after Fortis nationalisation

* Local properties drop on mortgage rate hike, HSBC job cuts

* Coal stocks tumble on Goldman Sachs downgrades

(Updates to close)

By Parvathy Ullatil

HONG KONG (Reuters) - Hong Kong shares fell 4.3 percent on Monday, sliding to near two-year lows as investors offloaded property stocks on a mortgage rate hike and job cuts at HSBC (0005.HK), while Ping An (2318.HK) tumbled on its exposure to newly-nationalised Fortis.

Dodging the decline, rechargeable battery and electric vehicle maker BYD (1211.HK) vaulted 42 percent after announcing the sale of a 10 percent stake to a unit of U.S. billionaire investor Warren Buffett's Berkshire Hathaway (BRKa.N). [nHKG299235]

Ping An Insurance dropped 10.5 percent on worries over a larger-than-expected losses due to its 5 percent stake in Fortis (FOR.BR), which the Belgian, Dutch and Luxembourg governments agreed to bail out over the weekend. Ping An stock has fallen almost 20 percent in the last two sessions, sinking to its lowest close since May 2007.

Goldman Sachs estimated the cumulative loss of Ping An's investment on Fortis at 17.5 billion yuan ($2.6 billion) as of Sept. 26.

The benchmark Hang Seng Index .HSI ended down 801.41 points at 17,880.68, taking year-to-date losses to almost 36 percent.

"U.S. stock futures indicate that all the indexes will open lower despite confidence that the $700 billion rescue package may be approved," said Philip Chan, head of research with CAF Securities.

U.S. stocks futures were down nearly 2 percent ahead of a congressional vote on the mega bailout package that aims to flush out toxic debt from the financial system. [nLT436737]

"It looks like the markets have already factored in the rescue package and now awaiting more asset sell-downs and bigger provisions."

Mainboard turnover was unchanged from Friday at HK$55 billion ($7.1 billion).

Shares in Hong Kong's largest property developer Sun Hung Kai Properties (0016.HK) dropped more than 5.1 percent to a 25-month low after HSBC hiked its mortgage rate for new borrowers by half a percentage point and cut 1,100 jobs amid the global financial crisis. Other banks are expected to follow suit with mortgage rate hikes and make borrowing more expensive as interbank rates rise.

The mortgage rate hike was followed by a series of cautious notes from major brokerages warning of greater declines in Hong Kong property prices owing to the sharp deterioration in the financial sector and slowing economy.

"We were previously too optimistic with our commercial rental forecasts for 2009. Given the sharp deterioration in the financial sector and the slowing economy, we now expect Central office rents to decline by 15 percent in 2009," said analysts with Credit Suisse on Monday.

Other local property developers followed suit, with Cheung Kong Holdings (0001.HK) falling 7 percent and property conglomerate New World Development (0017.HK) sliding 13.2 percent.

The China Enterprises Index .HSCE of top locally listed mainland Chinese firms fell 6.6 percent to 8,955.26.

China Insurance International Holdings (0966.HK) bucked the trend among Chinese financials to rally 6.3 percent on talk that newly-nationalised Belgian-Dutch financial group Fortis (FOR.BR) may sell its 24.9 percent stake in China's sixth-largest insurer Tai Ping Life to China Insurance International.

The stock earlier soared 15.4 percent to HK$16.02.

China Insurance International, which already holds a 50.05 percent stake in Tai Ping Life, is most likely to buy Fortis' stake according to a prior arrangement between the companies, said Merrill Lynch analysts.

Yanzhou Coal (1171.HK) fell 11 percent after Goldman Sachs reduced its rating on the stock to sell from buy while China Coal Energy (1898.HK) which was cut to neutral from buy slid 13.7 percent.

Shares in local small-cap lender Dah Sing Banking Group Ltd (2356.HK) fell 9.1 percent after the bank said its exposure to the failed Washington Mutual Bank (WaMu) totalled 31.9 million euros ($46.3 million).

A full write-off of all Dah Sing's exposure to WaMu would result in a post-tax charge to the income statement of about HK$330 million, the bank said in a statement.

Dah Sing Financial Holdings Ltd (0440.HK), the parent of Dah Sing Banking, slumped 15.1 percent to HK$33.65.

Shares in BYD's handset-manufacturing unit, BYD Electronic (0285.HK) also got a shot in the arm from news of Buffett's investment and soared as much as 72 percent on Monday. The stock closed up 21.3 percent after a brief suspension during the day.

($1=HK$7.8)

(Editing by Lincoln Feast)