HONG KONG, Oct 12 (Reuters) - Hong Kong stocks are set to open little changed, with the benchmark index expected to consolidate at a more than two-year peak and property stocks in focus ahead of a local land auction.
A rebounding mainland market and strong foreign flows into regional markets has lifted the Hang Seng Index <.HSI> out of a trading range that had been in place since November 2009.
The benchmark index closed up 1.2 percent on Monday at 23,207.31 and is up 13 percent since the end of August. The Shanghai Composite <.SSEC> has risen 6 percent in the past two days, the sharpest two-day gain in more than a year.
Speculation about another round of asset purchases by the U.S. Federal Reserve has grown after a weak jobs report on Friday, keeping the dollar weak and boosting flows into emerging market stocks and bonds and precious metals such as gold.
However, the Hang Seng Index's run up takes it into technically overbought territory with its relative strength index at 81, the highest in more than three years, and traders may use any short-term dollar rebound as an excuse to book profit.
U.S. stocks drifted in the lightest trading volume of the year on Monday as few dared to place bets ahead of key corporate results later this week. [.N]
Mainland banks could come under some pressure after Reuters reported that China had raised reserve requirements for six large commercial banks on a temporary basis, a surprise move to drain cash from the economy. [ID:nTOE69A03Y] . While the move was seen as mildly defensive, it came in response to excessive lending in September, the China Securities Journal reported.
The "Big Four" lenders -- Bank of China Ltd <3988.HK>, Agricultural Bank of China Ltd <1288.HK>, Industrial and Commercial Bank of China Ltd <1398.HK>, and China Construction Bank Corp <0939.HK> -- increased lending by more than 200 billion yuan ($30 billion) last month, the newspaper reported, citing an unnamed source.
Elsewhere in Asia, Japan's Nikkei <.N225> was down 0.5 percent while South Korea's KOSPI <.KS11> was 0.3 percent lower as of 0100 GMT.
STOCKS TO WATCH:
-CITIC Resources Holdings Ltd <1205.HK> expects to gain HK$1.85 billion ($239 million) in a Hong Kong listing of CITIC Dameng Holdings (CDH), in which it holds a 52.4 percent stake. http://www.hkexnews.hk/listedco/listconews/sehk/20101012/LTN20101012025.pdf
-Great Wall Motor Co Ltd <2333.HK>, whose shares were suspended on Monday, said it was applying to issue as many as 121.7 million A shares on the Shanghai Stock Exchange. Proceeds would be used for the production of diesel engines, aluminium alloy casting and automotive lighting. The counter will resume trading Tuesday. For a statement, click http://www.hkexnews.hk/listedco/listconews/sehk/20101012/LTN20101012021.pdf
-Air China Ltd <0753.HK> said it had won approval from the China Securities Regulatory Commission for a placement of A shares. http://www.hkexnews.hk/listedco/listconews/sehk/20101011/LTN20101011550.pdf
-Intime Department Store (Group) Co Ltd <1833.HK> said it had agreed to offer Henderson Land Development Co Ltd <0012.HK> HK$1.6 billion ($206 million) in shares for Sing Cheng, which owns 50 percent of Beijing Youyi Lufthansa. Intime will issue 147.7 million new shares, representing 7.7 percent of its enlarged share capital. For a statement, click http://www.hkexnews.hk/listedco/listconews/sehk/20101012/LTN20101012003.pdf
-CNOOC Ltd <0883.HK> will pay $1.1 billion for a stake in a U.S. shale oil and gas field, testing the U.S. political climate for the first time since its failed 2005 bid for Unocal. [ID:nN11129508]
-Winsway Coking Coal Holdings Ltd <1733.HK> fell 9 percent on its trading debut on Monday. [ID:nTOE69A047]
-Sam Woo Holdings <2322.HK> said Actiease Assets Ltd, which holds a 56.3 percent stake in the company, had been in talks with third parties on a potential share disposal. http://www.hkexnews.hk/listedco/listconews/sehk/20101011/LTN20101011724.pdf
-Hua Han Bio-Pharmaceutical Holdings Ltd <0587.HK> said it planned to form a joint-venture with NVSI to develop bio-pharmaceutical medicine products, including placenta pills, placenta blood albumin injection and placenta tissue fluid injection. http://www.hkexnews.hk/listedco/listconews/sehk/20101011/LTN20101011636.pdf MARKET SUMMARY *Wall Street ends flat [nN11131683] *Dollar up on bets recent declines too far, too fast[nN11124332] *ECB brings bond buying back to near halt [nFLABLE6CB] *Oil slips to $82, Saudis say $70-$80 "ideal" price [nSGE69A050] (Reporting by Vikram S Subhedar, Editing by Chris Lewis)