HK shares seen falling further as oil surges
HONG KONG, July 3 (Reuters) - Hong Kong shares are expected to slip lower on Thursday as crude oil prices continue to barrel through new records and concern over the U.S. economy peaked on disappointing jobs data overnight.
The Dow sank into a bear market on Wednesday after a report showed U.S. private employers cut the most jobs in nearly six years and oil shot to another record, increasing concerns about the health of the economy and corporate profits.
U.S. crude hit a high above $144 per barrel in overnight trade on Wednesday while copper breached the $4 per lb mark, as supply insecurities sent the two commodities rallying. [ID:nN02399903]
"The Dow slipping into bear territory was no suprise as it had been forecasted well ahead of time, but there is no denying the current market slump is a global phenomenon with most world markets in a similar position," said Ben Kwong, COO, KGI Asia.
"The Hong Kong market will continue to test lows. It will probably find support at 21,300 today."
Hong Kong shares fell 1.8 percent to a three-month low on Wednesday, with investors anticipating more profit warnings from listed companies after Cathay Pacific (0293.HK) warned of disappointing earnings in the first half.
Cathay shares tumbled 5.9 percent to their lowest level in two years.
The Hang Seng Index .HSI closed down 397.56 points at 21,704.45.
STOCKS TO WATCH
* China's second largest insurer Ping An Insurance (2318.HK) (601318.SS) clarified to the Shanghai stock exchange it was undergoing routine tax audits and dismissed market rumours of a tax probe that send its A-shares plunging on Wednesday.
Shares in Ping An dove 7.8 percent on Wednesday in Hong Kong on rumours of a tax probe by mainland authorities, as well as worries about the company's plan to shell out more cash to maintain its stake in Fortis (FOR.AS).
* Huadian Power International Corp (1071.HK) said on-grid electricity tariffs were increased between 3.9 percent and 4.9 percent from July 1 to ease the production and operation difficulties of power generation enterprises, secure power supply and promote conservation of resources. here
*Other power stocks will also be watched on media reports that Beijing will announce two more rounds of tariff increases later this year as its power producers grapple with surging coal costs.
The South China Morning Post cited Wang Shuaiting, chairman of China Resources Power Holdings (0836.HK) as saying that he expects the government to raise tariffs again this year. On-grid power tariffs were increased by an average of 4.7 percent on July 1.
* Property stocks may come under further pressure as HSBC (0005.HK) and Citibank joined other local lenders to hike mortagage rates by 0.25 percent for some borrowers amid higher interbank rates.
------------------------MARKET SNAPSHOT@00:04 GMT-----------
INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1,261.52 -1.82% -23.390 USD/JPY JPY= 105.88 0.04% 0.040 10-YR US TSY YLD US10YT=RR 3.959 -- 0.000 SPOT GOLD XAU= $942.45 -0.20% -1.900 US CRUDE CLc1 $144.07 0.35% 0.500 DOW JONES .DJI 11215.51 -1.46% -166.75 ASIA ADRS .BKAS 144.65 -2.60% -3.86 ------------------------------------------------------------- > US STOCKS-Dow enters bear market amid broad sell-off [.N] > Oil hits record above $144 on US inventory drop [O/R] > Dollar down on soft ADP ahead of U.S. jobs report [USD/] > TREASURIES-Bonds gain on job losses, weak stocks [US/] > Gold ends higher on inflation fear, record oil [GOL/] > SE Asian Stocks-Politics, inflation weigh on Malaysia [.SO]
(Reporting by Parvathy Ullatil; Editing by Jonathan Hopfner)
