HK stocks climb as PetroChina cheers lower oil

(For Shanghai market reports, click [.SS])
(Updates to Friday lunch close)

HONG KONG, May 16 (Reuters) - Hong Kong stocks rose 0.63
percent on Friday, tracking gains on Wall Street, with
petrochemical stocks PetroChina (0857.HK: Quote, Profile, Research) and Sinopec (0386.HK: Quote, Profile, Research)
leading the blue chips higher as oil prices retreated overnight.

But China's top power generator maker, Dongfang Electric
(1072.HK: Quote, Profile, Research), tumbled as much as 20 percent after it said the
earthquake in China had seriously damaged its production. The
stock was down 11 percent before the lunch break. [ID:nHKG131349]

The gains in U.S. stocks were largely due to merger and
acquisition news as the latest batch of U.S. economic indicators
was relatively weak, said Alex Tang, research director at Core
Pacific-Yamaichi International (HK) Ltd.

"Judging from the current low turnover in Hong Kong, retail
investors are not jumping in and institutional investors are
switching their holdings instead of increasing their stakes," he
said.

The benchmark Hang Seng Index .HSI had risen 161.80 points
to 25,675.51 by midday. The China Enterprises Index of Hong
Kong-listed mainland companies .HSCE, or H shares, gained 1.13
percent to 14,186.67.

Mainboard turnover edged up to HK$46.56 billion ($5.97
billion) from HK$45.3 billion on Thursday.

Investors are looking for bargains, and PetroChina and
Sinopec are big laggards compared with the blue chip-index, which
recovered in the second quarter to trim its loss this year to 7.7
percent.
PetroChina rose 3.8 percent on Friday but it has fallen 17
percent so far this year on record oil prices, which inflated its
costs. Sinopec, which has lost about 35 percent of its market
value this year, rose 2.7 percent.

Bulk cargo ship operators rose across the board after sea
freight rates for raw materials hit a record high.
[ID:nL15783729]

Sinotrans (0598.HK: Quote, Profile, Research) soared 7.8 percent, China COSCO (1919.HK: Quote, Profile, Research)
rose 3.7 percent and China Shipping Development (1138.HK: Quote, Profile, Research) gained
1.3 percent.

Container ship operator CSCL (2866.HK: Quote, Profile, Research) surged 6.5 percent.

"I guess shipping firms are approaching the last leg of the
recent rally and should trigger profit-taking later on high
valuation," said Francis Lun, general manager at Fulbright
Securities.
Sun Hung Kai Properties (0016.HK: Quote, Profile, Research) bucked the positive market
trend to fall 1.4 percent after its chairman filed a suit to
block the firm's directors from removing him, escalating a power
struggle at Hong Kong's largest property developer.
[ID:nHKG322253]

"The Kwok family dispute will affect the efficiency of its
management and fund managers prefer to unload their holdings
while they are waiting for new developments," Tang said.

Shares in Hunan Nonferrous Metals Corp (2626.HK: Quote, Profile, Research) jumped 15
percent after the stock resumed trading following an announcement
that it planned to pay about A$81.21 million in a takeover bid
for Australian mining firm Abra Mining (AII.AX: Quote, Profile, Research). For details
please see
here
(US$1=HK$7.8)
(Reporting by Alison Leung; Editing by Anne Marie Roantree)