(Updates to midday)
* HSI down 0.6 percent, H-share index down 1.2 percent
* Weak China markets weigh, CSI300 down 1.1 percent after
* Focus on profits, not policy in China: JPM's Mowat
* Tencent, AIA pull back from record highs
* ZTE shares slip after draft U.S. Congress report
By Vikram Subhedar
HONG KONG, Oct 8 (Reuters) - Hong Kong shares are poised to
snap a five-session streak of gains on Monday as Chinese markets
reopened on a weak footing after a week-long holiday, with
investors concerned China's slowdown could worsen.
The Hang Seng Index fell 0.6 percent to 20,879.4
points by the midday break. The index of top locally listed
Chinese shares fell 1.2 percent and was the weakest
among regional benchmarks in Asia.
On the mainland, the CSI300 fell 1.1 percent while
the Shanghai Composite was down 0.8 percent as domestic
investors returned to the market after the Mid-Autumn Festival
and National Day holidays.
Shares of PetroChina, down 0.7 percent, were the
top losers on the CSI300 followed by major producers of premium
liquor such as Kweichow Moutai, down 3.4 percent,
partly on worries over weak sales over the Golden Week holiday.
Chinese shares in Hong Kong led losses with China Mobile
down 1.1 percent while Tencent Holdings
slipped 1.7 percent, pulling away further from a record high hit
Hong Kong shares had risen for five straight sessions on
hopes that China would announce measures to lift growth and
boost the market heading up to the once-in-a-decade leadership
transition expected to get under way next month.
"I think investors are barking up the wrong tree here," said
Adrian Mowat, JPMorgan's chief emerging markets strategist who
maintains an "underweight" rating on China stocks.
"Our mantra on China is focus on profits not policy," said
Mowat, adding that excess capacity is still a problem in China
that continues to weigh on profit margins.
While the pace of cuts in earnings forecasts has slowed
analysts are still trimming estimates for Chinese profits.
Over the past month, analysts have cut expectations for
forward 12-month earnings for MSCI China constituents by 0.3
percent, according to Thomson Reuters I/B/E/S.
Earnings season in the United States gets under way on
Tuesday with aluminum producer Alcoa expected to show it
broke even in the third quarter although investors will likely
focus more on comments about global demand.
The World Bank cut its growth forecasts for the East Asia
and Pacific region on Monday and said there was a risk the
slowdown in China could get worse and last longer than expected.
Worries over growth kept cyclical sectors weak across the
board in Hong Kong with defensives such as utilities
outperforming and recent outperformers hit by profit-taking.
CLP Holdings rose 0.5 percent while Hong Kong &
China Gas was up 0.4 percent. Insurer AIA Group
eased 1 percent.
ZTE Corp fell 3.7 percent, the top loser on the
China Enterprises Index, after a draft report by the U.S.
Congress said China's top telecommunications gear makers should
be shut out of the U.S. market because they pose a security
(Editing by Jacqueline Wong)