HK shares off lows on China Mobile, CNOOC gains

HONG KONG, July 3 (Reuters) - Hong Kong stocks eked out a small gain on Thursday after opening 1.5 percent lower, helped by a late morning rally by index heavyweights China Mobile (0941.HK: Quote, Profile, Research, Stock Buzz) and CNOOC (0883.HK: Quote, Profile, Research, Stock Buzz) as investors shopped for bargains.

Ping An Insurance (2318.HK: Quote, Profile, Research, Stock Buzz) (601318.SS: Quote, Profile, Research, Stock Buzz) fell another 6.8 percent after Wednesday's 7.8 percent plunge as investors continued to dump the stock on rumours of a government probe into tax evasion, as reported by the official Xinhua news agency.

The company denied the talk. [ID:nSHA343105].

"At this stage, it's very difficult to say whether the tax audit will reveal any irregularities. But the selling pressure on the stock will continue as there is a lot of negative news surrounding this company," said Conita Hung, research head with Delta Asia Securities.

Shares in China's second largest insurer have also come under pressure from a continued slide in Chinese bourses, and worries over its plan to maintain a 5 percent stake in Fortis (FOR.AS: Quote, Profile, Research, Stock Buzz) by buying more shares in the Belgian-Dutch financial firm's upcoming capital-raising.

Macau casino operator Galaxy Entertainment (0027.HK: Quote, Profile, Research, Stock Buzz) plummeted 12.5 percent to its lowest level in more than two and a half years, while A-Max Holdings (0959.HK: Quote, Profile, Research, Stock Buzz) dropped 14.4 percent.

Despite 70 percent growth in revenues in June, analysts expect Macau casino profits to come under pressure given the increased cost of operations, cut-throat competition and policy irregularities.

The Hang Seng Index .HSI ended the morning up 36.78 points or 0.2 percent at 21,741.23. Mainboard turnover fell to HK$39.78 billion ($5.1 billion) from HK$39.35 billion at mid-day Wednesday.

CNOOC climbed 1.3 percent as crude oil prices hit a new high above $144 per barrel on a weak dollar and supply uncertainties.  Continued...