Hong Kong shares may start lower with wary eye on Fed

HONG KONG, July 17 Wed Jul 17, 2013 1:41am BST

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HONG KONG, July 17 (Reuters) - Hong Kong shares are expected to start lower on Wednesday, with turnover to stay weak ahead of U.S. Federal Reserve Chairman Ben Bernanke's testimony in Congress where he is due to defend the Fed's bond purchasing programme.

State television reported late on Tuesday Chinese Premier Li Keqiang as saying the government should not rush into changing policy as long as economic growth stays within the official comfort zone, although it needs to be vigilant about a sharper slowdown.

On Tuesday, the Hang Seng Index ended flat at 21,312.4. The China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.3 percent in anemic turnover, some 30 percent below its average in the last 20 sessions.

Elsewhere in Asia, Japan's Nikkei was down 0.7 percent, while South Korea's KOSPI was down 0.2 percent at 0026 GMT.

FACTORS TO WATCH:

* China's land prices are expected to rise further in the third quarter this year after picking up in the second, the Ministry of Land and Resources said on Tuesday, fuelling market expectations that a rebound in home prices may be sustained.

* Profits at Chinese state-owned companies grew 7 percent to 1.11 trillion yuan ($180 billion) in the first six months of this year, swinging back from a decline a year earlier but still underscoring weak growth momentum in the world's second-biggest economy, the Finance Ministry said in a statement on its website.

* China is pushing hard for only limited restrictions on its solar panel exports to the European Union, complicating talks aimed at avoiding hefty tariffs on Chinese firms and a possible trade war, a document obtained by Reuters showed on Tuesday.

* Haitong Securities , China's second-largest listed brokerage, expects its first-half net profit to rise 31.6 percent from a year earlier, it said in a filing to the Shanghai Stock Exchange after markets shut on Tuesday.

* Datang Power , which operates coal-fired electric power plants that supply electricity to Beijing and industrial cities in northern China, said it expects first half net profit to increase by 70 to 80 percent from a year earlier, according to a filing to the Shanghai Stock Exchange on Tuesday.

* China National Offshore Oil Corp (CNOOC), parent of Hong Kong-listed CNOOC Ltd, signed its 200th production-sharing contract with a foreign partner on Tuesday, teaming up with BP to drill in the South China Sea.

* China's wheat crop has suffered more severely than previously thought from frost in the growing period and rain during the harvest, and import demand to compensate for the damage could see the country eclipse Egypt as the world's top buyer.

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