HONG KONG, Sept 13 (Reuters) - Hong Kong stocks are set to begin the week higher after data showed Chinese factories ramping up production in August, further bolstering optimism that Chinese growth would underpin global recovery.
Investors have been worried that global weakness alongside the central government's campaign to rein in property prices and bank loans could weigh on markets, but positive August data, which included robust imports, have eased those fears.
While inflation accelerated to its fastest pace in 22 months, the bulk of price rises stemmed from higher food costs, which analysts have said should be temporary after a period of bad weather across China this summer.
U.S. stocks closed out the previous week with their seventh gain in eight sessions as worries over a double-dip faded, although Friday's gains were on light trading volume, in part because of the holiday-shortened week.
Data from China is likely to lift the Shanghai Composite index above key resistance at 2,700, about a percent above current levels, giving a boost to Hong Kong shares, said Conita Hung, head of equity research at Delta Asia Financial.
"Also, after China's central bank decided not to raise interest rate over the weekend, investors finally get a clear signal and restore some data-backed optimism," said Hung.
Bank shares are likely to be in focus after global regulators agreed on Sunday to triple the amount of top-quality capital held in reserves at banks, as part of a set of rules aimed at preventing another international credit crisis.
Japan's largest banks gained after the Basel III accord was less stringent than feared.
Hong Kong's Hang Seng Index rose on Friday, posting a second successive weekly gain, led on the day by blue chips CNOOC Ltd and HSBC Holdings Plc.
Elsewhere in the region, Japan's Nikkei was up 1.4 percent while South Korea's KOSPI was 0.6 percent higher as of 0100 GMT.
STOCKS TO WATCH:
- China Huiyuan Juice Group Ltd, which controls more than 10 percent of China's fruit and vegetable juice market, is still negotiating with banks regarding its loans and will resume trade on Monday following a suspension after its shares plunged on news that it had breached loan covenants.
- Trading in shares of BaWang International Group will resume on Monday after the Chinese herbal shampoo maker said it had replaced packaging for products that the mainland authorities had said contained misleading information.
- Air China Ltd said it had agreed to buy four 777-300ER aircraft from Boeing Co at a total basic price of $1.15 billion to expand its fleet.
- Agricultural Bank of China Ltd, the country's third-biggest lender, may issue subordinated debt to beef up capital, a senior executive told Reuters.
- Chinese power producer Huadian Power International Corp Ltd said on Friday that it would form a power joint venture company with total investment of 7.2 billion yuan ($1.06 billion).
- China's Sinopec Group and CNOOC Ltd are bidding for stakes in assets owned by Brazilian oil and gas start-up OGX SA in a potential $7 billion deal, sources with direct knowledge of the matter said on Friday.
- Yuexiu Property Co Ltd said it had bought land for residential, office and commercial development in Foshan in Guangodng province for 1.35 billion yuan. For statement click http://www.hkexnews.hk/listedco/listconews/sehk/20100910/LTN20100910334.pdf
- Shui On Land Ltd said it had increased the issue size of a yuan-denominated and U.S. dollar-settled 4.5 percent convertible bond issue due in 2015 by 680 million yuan to 2.72 billion yuan as the manager exercised an upsize option. For statement click http://www.hkexnews.hk/listedco/listconews/sehk/20100913/LTN20100913011.pdf (Reporting by Vikram S Subhedar; Editing by Chris Lewis)