HONG KONG, Sept 18 (Reuters) - Hong Kong shares are set to fall on Friday, tracking softer oversea markets, with profit-taking expected to dominate trading on concern that recent gains were overextended, but ample liquidity may limit the slide.
The benchmark index has risen more than 1,000 points in the last two trading days to hit a 13-month high on Thursday on accelerating optimism for an economic recovery.
"The recent rally has been unreasonable, and the market has gone crazy. It has come time to take a breather," said Francis Lun, a general manager at Fulbright Securities.
Lun predicted the index to slide about 200 points but said liquidity may limit the downside and fuel buying again when investment funds try to park cash in the local market with banks and financial stocks remaining a focus.
The benchmark Hang Seng Index rose 1.71 percent on Thursday to 21,768.51, while the China Enterprises Index, which represents top locally listed mainland Chinese stocks, climbed 1.14 percent to 12,668.25.
China's key stock index the Shanghai Composite Index edged up 0.10 percent to 3,063.309 on Friday morning.
STOCKS TO WATCH-
* Shun Tak Holdings Ltd said on Friday that it planned to issue convertible bonds to raise about HK$1.395 billion to fund new investment opportunities and as working capital. The bonds, with a conversion price of HK$8.18, represents about 8.56 percent of its enlarged issue capital if fully converted. http://www.hkexnews.hk/listedco/listconews/sehk/20090918/LTN20090918004.pdf
* Lonking Holdings Ltd issued a profit warning on Friday. The company said net profit for the six months ended June was expected to be considerably lower than the previous year because of a lower foreign exchange gain and the fair value adjustment of a financial instrument related to its convertible bonds. http://www.hkexnews.hk/listedco/listconews/sehk/20090918/LTN20090918009.pdf
* Wheelock and Co Ltd and its unit Wharf (Holdings) Ltd said they succeeded in bidding for land for commercial and residential development in China's Tianjin city for 641 million yuan. http://www.hkexnews.hk/listedco/listconews/sehk/20090917/LTN20090917695.pdf
* China's Geely Group, parent of Geely Automobile Holdings,
has approached Magna International
* China's offshore oil and gas specialist CNOOC Ltd and its foreign partners would strike seven to 12 deepwater wildcat wells in the South China Sea next year, a company official said on Thursday. --------------------- MARKET SNAPSHOT @ 2344 GMT -------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 <.SPX> 1,065.49 -0.31% -3.270
USD/JPY
MARKETS SUMMARY *Wall St edges down after three-day run higher [nN17225852] *Oil slips slightly, eyes weak equities [nNSP384727] *US dollar falls nears 12-month low against euro [nN17225315] *Bonds resume upward march after mixed US data [nN17568682] *Gold eases from 18-month high on profit taking [nLH459748] (Reporting by Donny Kwok; Editing by Chris Lewis)