HONG KONG, Aug 30 (Reuters) - Hong Kong stocks are set to rise on Monday, tracking strength in overseas markets after comments by U.S. Federal Reserve Chairman Ben Bernanke lifted confidence in the health of the U.S. economy.
U.S. stocks rebounded to post their best gains in nearly four weeks on Friday with the Dow Jones Industrial Average up 1.65 percent at 10,150.65. The Standard & Poor's 500 Index jumped 1.66 percent and the Nasdaq Composite Index climbed 1.65 percent.
"We may be close to finishing this stage of readjustment as the Fed said last Friday that they would act promptly and are likely to pump in cash if economic growth is slower than they want," said Francis Lun, general manager, Fulbright Securities.
"This is the most important piece of news that will boost both the Hang Seng Index and the Shanghai Composite Index today and probably in the week ahead," Lun said, adding that the Hang Seng Index could gain about 300 points today.
Hong Kong stocks ended 0.07 percent weaker on Friday, with the Hang Seng Index at a one-month closing low as China Life Insurance extended its slide after a disappointing earnings outlook prompted a selloff.
Bank shares are seen to be a focus with Agricultural Bank of China expected to attract attention after it posted strong interim earnings.
Elsewhere in the region, Japan's Nikkei was up 2.77 percent while South Korea's KOSPI was up 1.35 percent.
STOCKS TO WATCH:
- Agricultural Bank of China Ltd, the country's third-biggest lender, received a boost from a borrowing binge and lower credit costs, helping it to post its best half year ever..
- Chinese retailer GOME Electrical Appliances Holding Ltd said it had received a letter from a company owned by its jailed founder and biggest shareholder seeking to terminate several agreements with the company.
- China Shenhua Energy Co Ltd, the world's most valuable coal producer, warned on Friday that demand growth in the second half could slow, even as it posted a record second-quarter profit on higher sales..
- Semiconductor Manufacturing International Corp (SMIC), China's largest chipmaker, on Friday posted a smaller first-half loss of $85.91 million, compared with a loss of $276.54 million a year earlier. For full statement please click http://www.hkexnews.hk/listedco/listconews/sehk/20100827/LTN20100827588.pdf
- Dongfeng Motor Group Co Ltd, an automotive manufacturer in China, said first-half net profit more than doubled to 6.53 billion yuan. For full statement please click http://www.hkexnews.hk/listedco/listconews/sehk/20100827/LTN20100827576.pdf
- China Eastern Airlines Corp Ltd said first-half net profit rose 79 percent to 1.76 billion yuan because of a surge in passenger traffic. For full statement please click http://www.hkexnews.hk/listedco/listconews/sehk/20100829/LTN20100829079.pdf (Reporting by Donny Kwok; Editing by Chris Lewis)