HK shares fall but bargain hunting cushions loss

(For Shanghai stock market reports, click [.SS])
(Adds Friday lunch close, details)

By Rita Chang

HONG KONG, Feb 15 (Reuters) - Hong Kong stocks fell on Friday
after rising for three straight days, while fresh woes in the
credit market weighed on global lender HSBC Holdings plc
(0005.HK: Quote, Profile, Research, Stock Buzz).

But oversold conditions in sectors like shipping and paper
led to bargain hunting.

Some mainland commodity stocks also advanced, boosted by
higher metal prices and imminent rebuilding efforts in China
following severe weather conditions that caused widespread damage
across the country.

"We're performing better than Wall Street," said Andrew To,
sales director at Tai Fook Securities. "The market's grossly
oversold and most portfolios have lightened their holdings. I
expect more recovery in the afternoon."

To said the day's loss would be 500 points at most, though a
300- to 350-point decline was more probable, barring any sharp
falls in the Japanese and mainland equity markets.

The benchmark Hang Seng Index .HSI had fallen 1.8 percent
to 23,595.69 by lunch. The China Enterprises Index of Hong
Kong-listed mainland companies .HSCE, or H shares, declined 0.8
percent to 13,436.93, supported by shipping and materials stocks.

Mainboard turnover was HK$40.1 billion (US$5.1 billion),
compared to Thursday morning's HK$49.9 billion.

HSBC slid 2.7 percent to HK$113.1 after revelations that
Swiss bank UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) (UBS.N: Quote, Profile, Research, Stock Buzz) was saddled with tens of
billions of dollars in new exposure to risky U.S. debt.

Many shipping stocks made further gains, bolstered by a
recovery in the Baltic Dry Index .BADI, an indicator for
commodity-freight rates. China COSCO (1919.HK: Quote, Profile, Research, Stock Buzz), up 4.4 percent at
HK$24 in another day of heavy trade, looked set for a
fourth-straight gaining session. China Shipping Container Lines
(CSCL) (2866.HK: Quote, Profile, Research, Stock Buzz) leapt 5.8 percent to HK$3.46.

Paper product makers clawed back some of their recent losses,
with Nine Dragon Paper (2689.HK: Quote, Profile, Research, Stock Buzz) surging 6.1 percent to HK$13.94
and Lee & Man Paper (2314.HK: Quote, Profile, Research, Stock Buzz) jumping 5.4 percent to HK$20.35.

Among materials stocks, Aluminum Corp of China (Chalco)
(2600.HK: Quote, Profile, Research, Stock Buzz), the country's top alumina producer, ramped up a
further 3.6 percent to HK$13.84 amid higher aluminum prices.

Angang Steel (0347.HK: Quote, Profile, Research, Stock Buzz) rose a further 1.8 percent to HK$16.86
on booming steel prices. Cement plays also did well in
anticipation of rebuilding efforts in mainland China. Anhui Conch
(0914.HK: Quote, Profile, Research, Stock Buzz) rose 3.6 percent to HK$57.35 and China National
Building Material (3323.HK: Quote, Profile, Research, Stock Buzz) vaulted 6.9 percent to HK$23.95.

Bank of East Asia (0023.HK: Quote, Profile, Research, Stock Buzz) dropped 5 percent to HK$40.80
ahead of its earnings due during the lunch break.
(US$1=HK$7.8)
(Editing by Anne Marie Roantree)