HK shares expected to open lower on U.S. worries
HONG KONG, June 5 (Reuters) - Hong Kong shares are expected to open lower on Thursday, with lingering fears over the state of the U.S. financial market and rising inflation in China likely to weigh on stocks.
A slew of bad news concerning major U.S. banks in the past few days and a statement by the Fed that stoked inflation worries have cast a pall on trading in the local bourse, as investors are convinced that the U.S. credit crisis is yet to run its course.
"Continued weakness in the U.S. financial sector and the mixed close on Wall Street will impact the local market. H-shares will lead losses as investors fret about China's inflation ahead of the CPI data next week," said Alex Tang, research director with Core-Pacific Yamaichi International
The Hang Seng Index closed 1 percent lower on Wednesday, led by telecom and resources stocks.
STOCKS TO WATCH
* China Telecom (0728.HK) may buck the trend among mainland telecoms shares and gain in Thursday trade after it confirmed it had been approached by several prospective investors about buying a stake in the firm.
* COSCO Pacific (1199.HK) will be in focus as it resumes trade on the local exchange after confirming it had made a bid for certain concession rights of the Piraeus Port in Greece at around 500 million euros. The bid amount is well below the 4.3 billion euros reported in the media earlier.
* Oil producers are expected to extend Wednesday's losses as oil prices slid further in overnight trade after U.S. government data showed a sharp rise in U.S. gasoline inventories. Crude prices fell to $122.30 a barrel, their lowest level since May 6.
* Offshore oil producer CNOOC (0883.HK), which fell to its lowest level since end-April on Wednesday, and PetroChina (0857.HK) will come under further selling pressure. However, airline stocks were likely to extend their recent gains.
* Coal stocks -- Yanzhou Coal (1171.HK), China Shenhua (1088.HK) and China Coal (1898.HK) -- may recover some ground after tumbling on Wednesday. Yanzhou led losses with an 8.9 percent drop after its home province of Shandong cut the prices of some thermal coal for three months, impacting 20 percent of the coal producer's production. Analysts dismissed fears of further price regulation.
* Beijing Capital International Airport (0694.HK) said the sovereign fund Government of Singapore Investment Corp had increased its stake in the airport operator to 5.9 percent from 0.2 percent by buying 250 million shares for HK$1.86 billion -------------------MARKET SNAPSHOT @ 00:04 GMT --------------
INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1,377.20 -0.03% -0.450 USD/JPY JPY= 105.25 -0.01% -0.010 10-YR US TSY YLD US10YT=RR 3.973 -- 0.010 SPOT GOLD XAU= $877.20 -0.05% -0.450 US CRUDE CLc1 $122.23 0.06% 0.040 DOW JONES .DJI 12390.48 -0.10% -12.37 ASIA ADRS .BKAS 164.28 0.67% 1.10 -------------------------------------------------------------
FACTORS TO WATCH: * Nikkei falls 0.6 pct, trading firms hit by oil [.T] * US stocks-Dow slips on credit, inflation worries. [.N] * STOCKS NEWS ASIA-Market factors, main events [STXNEWS/ASIA] * Oil falls on US fuel stock build, demand worries [O/R] * Dollar holds post-Bernanke gains, kiwi falls [USD/] * For upcoming Hong Kong events, click on [HK/DIARY] * For Hong Kong press digest, click on [PRESS/HK]
KEY HK ADR MOVERS (by % change) Yanzhou (YZC.N)(1171.HK) -10.2 CNOOC Ltd (CEO.N)(0883.HK) -3.95 China Unicom (CHU.N)(0762.HK) -3.77 China Netcom CN.N(0906.HK) -2.58 Aluminum China (ACH.N)(2600.HK) -1.66 China Life (LFC.N)(2628.HK) -1.62
(Reporting by Parvathy Ullatil; Editing by Anne Marie Roantree)
(Reuters Messaging parvathy.ullatyil@thomsonereuters.com, +852 28436415).
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