(Updates to midday)
* HSI down 0.3 pct, CSI300 down 0.1 pct
* Turnover in HK, Shanghai midday volume nears 2012 lows
* Hutchison, Cheung Kong Holdings weak after UK utilities
* China property A-shares weak after Nanjing clarification
By Clement Tan
HONG KONG, July 25 (Reuters) - Hong Kong shares looked set
for their third straight daily loss on Wednesday, dragged lower
by local conglomerate Hutchison Whampoa after a group of
companies it controls announced plans to acquire a UK gas
Strength in defensive sectors and low turnover pointed to
further weakness amid deepening worries that Spain might need a
bailout and signs that Greece may need a further debt
restrucuring, as well as a slew of corporate profit warnings as
China's slowing economy takes its toll.
The Hang Seng Index was down 0.3 percent at 18,844.2
points by midday, though it managed to pull off early lows. The
China Enterprises Index of the top Chinese listings in
Hong Kong shed 0.2 percent.
In the mainland, the CSI300 Index of the top
Shanghai and Shenzhen listings was down 0.1 percent. The
Shanghai Composite Index inched up 0.2 percent in midday
volume that neared the year's lows.
"We are seeing people being more defensive going into the
earnings season," said Hong Hao, chief strategist at Bank of
Communications (BoComm) International Securities.
"GOME's weakness is a measure of how people still had
expectations of a strong recovery in China not too long ago and
are now coming to terms with reality," Hong added.
Shares of Bain Capital-backed GOME Electrical Appliances Ltd
tumbled 10.5 percent in Hong Kong after China's
second-largest home appliance retailer warned it expects to post
a net loss for the first half of 2012 attributable to its
Li Ka-Shing's Hutchison Whampoa was the top drag
on the Hang Seng Index, shedding 2 percent to its lowest since
June 29. It is up 3.1 percent in 2012 to date, compared with the
2.2 percent gain on the Hang Seng benchmark.
Property developer Cheung Kong (Holdings) Ltd, an
affiliate of Hutchison, said it had formed a joint venture with
Cheung Kong Infrastructure Holdings Ltd, Power Assets
Holdings Ltd and the Li Ka Shing Foundation Ltd to buy
UK gas company Wales and West Utilities for 645 million pounds
Cheung Kong Holdings slipped 0.8 percent while Power Assets
shed 1.2 percent and trading in Cheung Kong Infrastructure was
suspended on Wednesday before markets opened.
CHINA PROPERTY CONFUSION CONTINUES
In onshore Chinese markets, property developers were weak
after the Nanjing housing bureau said mainland news reports on
Tuesday that the city was lifting home purchasing restrictions
were a "misunderstanding".
The news had triggered strong gains for the sector in the
A-share market on Tuesday, but Chinese property developers were
among the bigger percentage losers on Wednesday.
The Chinese Academy of Social Sciences has suggested that
cancelling the mortgage rate discount for first time homebuyers
and pre-sale practice are necessary moves to prevent a sharp
rebound in home prices, according to mainland news outlets on
The Shanghai property sub-index fell 1.6 percent.
Poly Real Estate was down 1.8 percent, poised for
its fifth daily loss in six sessions.
Poly Real Estate shares are still up 35 percent so far this
year, although investors have been taking profits in recent
sessions after official data last week showed housing prices
rising for the first time in nine months, sparking fears Beijing
could clamp down further on the sector.
(Editing by Kim Coghill)