CORRECTED - HK shares pile up losses on post-earnings caution

 (Corrects in penultimate paragraph to remove reference to
market opening)

 * China Mobile dives to lowest close in a year

 * Esprit slumps to two-year low after disappointing H1

 * PetroChina, Sinopec tumble amid higher oil prices

 
 (Updates to close)

 By Parvathy Ullatil

 HONG KONG, Aug 28 (Reuters) - Hong Kong shares fell 2.3
percent on Thursday, as major Chinese telcos hit year lows and
Esprit Holdings (0330.HK) tumbled to its lowest close in two
years amid gloomy analyst forecasts, while oil refiners slid on
higher crude prices.

 China Mobile (0941.HK), the world's largest wireless
carrier, dived 6.3 percent, erasing the previous session's
gains, as the company was seen gearing up to face increasing
competition in a shifting telecoms landscape and pressure on
voice margins. [ID:nHKG10651]

 JPMorgan downgraded China Mobile (CHL.N) to underweight from
overweight on Thursday and slashed the target price by 50
percent to HK$75. [ID:nHKG36125]

 The stock plunged more than 8 percent to HK$88.65 before
closing at HK$90.45. China Mobile recorded its steepest
single-day fall since May 26, after the government announced its
sweeping sector revamp.

 Shares in Esprit Holdings (0330.HK), the world's No. 5
fashion retailer, slumped 17.9 percent to its lowest level since
September 2006 after the company missed earnings forecasts and
cautioned investors about tougher times ahead.

 Merrill Lynch downgraded Esprit Holdings to underperform
from buy after the fashion retailer posted a 12.5 percent
increase in second half net profit at HK$3.15 billion, lagging
forecasts.

 The benchmark Hang Seng Index .HSI finished 492.43 points
lower at 20,972.29 after opening 0.4 percent higher.

 Mainboard turnover rose to HK$66.7 billion ($8.6 billion)
from HK$61 billion on Wednesday.

 "Over the last couple of days many investors were persuaded
into long positions and what we saw today was basically people
winding up those positions and going short again. Investors are
back to being very wary," said Andrew Sullivan, sales trader
with Mainfirst Securities.

 "We saw money rotating out of telecoms after people got
enough time to absorb the China Mobile earnings and understand
the challenges it faces."

 PetroChina shares (0857.HK) gave up 3.3 percent after
reporting a disappointing 38 percent drop in its quarterly
earnings after refining losses and windfall taxes dented gains
from soaring crude oil prices. [ID:nHKG15523]

 Analysts expect Asia's largest oil producer to come under
pressure again in the second half, even after Beijing raised
gasoline and diesel prices by 18 percent late in June, because
the government may scrap a tax rebate on imported crude.

 Asia's largest refiner Sinopec Corp (0386.HK) slipped 5.3
percent after oil prices rose further on Thursday.

 "There seems to be a shift in investors psychology towards
oil prices. People expect oil prices to keep rising in the short
term as the hurricane season wears on," said Andrew Chan,
analyst with Daiwa Institute of Research.

 Sinopec and PetroChina have been squeezed by the widening
gap between rising international crude oil prices and
state-capped fuel prices in China.

 The China Enterprises Index .HSCE of top locally listed
mainland Chinese firms dropped 2.4 percent.

 China Unicom (0762.HK) dropped 7.3 percent on continued
concerns over the company's aggressive capital expenditure plans
over the next two years as it seeks to compete with bigger rival
China Mobile through the launch of a 3G platform.

 China Netcom 0906.HK, which is soon to be merged with
Unicom, skidded 7.7 percent.

 Shares in CNOOC Ltd (0883.HK) gained 2.9 percent after
China's largest offshore oil producer beat first-half earnings
forecasts with gains from skyrocketing crude prices.

 Car maker Dongfeng Motor Group (0489.HK) jumped 4.3 percent
after posting a 27.1 percent increase in first half net profit.
 (Reporting by Parvathy Ullatil; Editing by Ken Wills)