REFILE-HK stocks end down 2.6 pct as China stimulus hopes fade

* China shares tumble as hopes fade for gov't stimulus plan

* Refiners take a beating as oil prices climb again

* Tsingtao Brewery continues upward march after H1 results (Refiles to put closing level in headline, updates prices to close)

By Parvathy Ullatil

HONG KONG, Aug 21 (Reuters) - Hong Kong shares fell 2.6 percent on Thursday, wiping out the previous session's gains, as hopes faded that Beijing will imminently launch a package to stimulate the economy and badly battered mainland Chinese markets.

"It is unrealistic to expect the government to rescue the market," said Li Ka-shing, chairman of Hutchison Whampoa (0013.HK) and an influential investment guru in the local market.

"Speculators should be very cautious now....the worst is not over in the global credit crisis," Li warned at a news conference after his two flagship companies reported first-half results.

Li's flagship conglomerate Hutchison slipped 1.3 percent on Thursday despite announcing a smaller-than-expected 63 percent decline in first-half earnings.

Sister company Cheung Kong Holdinsg (0001.HK) also surprised with a HK$12.02 billion net profit, which is 35 percent lower than last year but nearly double the HK$6.1 billion forecast by four analysts polled by Reuters. The stock fell 2.8 percent amid weak broad market sentiment.

The Hang Seng Index .HSI closed 539.20 points lower at 20,392.06, settling at yet another low for 2008. The index has given up nearly 27 percent so far this year.

Selling intensified in the afternoon on expectations that the city's financial markets may be closed on Friday due to an approaching typhoon.

The blue-chip index rose 2.2 percent on Wednesday, tracking a 7.6 percent rally in Shanghai, on hopes of a market stimulus package and expansionary fiscal policies from Beijing.

The Shanghai Composite Index .SSEC fell 3.6 percent on Thursday.

"The stimulus plan is just a rumour at this point and investors are pessimistic enough to treat no news as bad news," said Peter Lai, director at DBS Vickers.

Many fund managers and analysts expect the government to adopt some market and economy boosting steps before the end of this year, but most are uncertain about the timing and size of the package.

The stimulus hopes were fuelled by a report by Frank Gong, chief China economist at JPMorgan Chase, who wrote that China's leaders were considering a package of at least 200-400 billion yuan ($29-58 billion) and might ease monetary policy by end-2008.  Continued...