HONG KONG, Aug 24 (Reuters) - Hong Kong stocks are set for a weaker open on Tuesday as a flight to safety sent global stocks lower amid fears about economic growth.
U.S. stocks gave back early gains and fell on Monday as a slew of corporate takeover activity, usually a sign of investor optimism, was outweighed by concerns about the global economy.
"I sense we are moving into a sell on the news, with the news being we are in a 'catalyst free zone' for the next month or so," said a Hong Kong-based trader in an emailed note.
The benchmark Hang Seng index ended 0.4 percent lower on Monday as resource and banking issues weighed, keeping the index below a key resistance level at its 200-day moving average. Turnover fell to its lowest in about six weeks, suggesting investor caution.
The China Enterprise Index of top locally listed mainland firms fell 0.9 percent.
Chalco will be in focus after the wordl's biggest aluminum company by market value reported a second-quarter loss and said it expected aluminum prices to remain volatile in the second half.
The Hang Seng will continue to be affected by the weak economic outlook for developed economies given its close correlation to major equity markets but is likely to find support from a rebound in mainland shares.
According to research firm TrimTabs, the cash balance in Chinese investment accounts increased for the fifth straight week, with most of the money flowing into the secondary market, suggesting retail sentiment continues to improve in China.
Several brokerage houses including Morgan Stanley, BNP Paribas and UBS have said Chinese equities bottomed out earlier this year and are set to outperform regional peers.
STOCKS TO WATCH:
- Chinese retailer GOME Electrical Appliances Holding Ltd has set a special meeting date to address controversial measures proposed by its jailed founder and biggest shareholder, and said Bain Capital would convert its convertible bonds into equity. Trading in the shares will resume on Tuesday.
- China Construction Bank Corp (CCB), China's biggest lender to home buyers, said recent declines in real estate prices would likely have little impact on operations, with overall bad loans kept at a low 1.2 percent.
- PCCW said it would sell HK$1.3 billion ($167 million) worth of new shares to third party investors, raising capital to repay existing indebtedness and for general corporate purposes.
- China Petroleum & Chemical Corp (Sinopec), Asia's top oil refiner, said its refining margins held relatively steady in July and August from the second-quarter's weak levels, boding ill for the company's short-term profit outlook.
- ZTE Corp, China's No.2 telecommunications equipment maker, said it would build a mobile network for the Hungarian unit of Norway's Telenor ASA, its latest inroad into competitive European markets.
- China's BYD Co Ltd, backed by U.S. billionaire Warren Buffett, warned on Monday of a slowdown in car sales during the second half of the year and said it would launch new models to lessen the impact.
- Tianjin Development Holdings said it would sell all its 83.9 percent stake in the Eastern Outer Ring Road in China's Tianjin to its joint venture partner for 1.2 billion yuan. For statement click http://www.hkexnews.hk/listedco/listconews/sehk/20100823/LTN20100823588.pdf (Reporting by Vikram S Subhedar, Editing by Jonathan Hopfner)