Hong Kong Hot Stocks - Chalco falls, Steel cos rise

By 0240 GMT the Hang Seng Index .HSI was percent 0.8 percent higher at 14,085.26 after opening 0.3 percent lower.

The China Enterprises Index of top locally listed mainland Chinese firms .HSCE had risen 0.7 percent to 7,365.43.

Here are some of the stocks on the move in early trade-

* Aluminum Corp of China (2600.HK), or Chalco, dropped 3.6 percent, adding to Monday's 8 percent slide, after Credit Suisse cut its earnings estimate for the company by 62 percent in 2008 and 138 percent in 2009 amid slumping alumina and aluminium prices.

"We believe at current power and alumina prices, the Chinese aluminium industry is deeply cash negative. Production cuts are likely to get deeper in the coming months, and the sector is likely to reach a trough in the first half of 2009," said the brokerage in a report Monday.

Chalco reduced spot alumina prices by 23 percent in early January after cutting prices by 38 percent in 2008.

* Steel stocks were lifted by talk of a support package for the industry from Beijing that may include tax cuts and incentives to promote industrial consolidation. [ID:nLC149722]

China's cabinet will discuss steps this week to support its slumping steel and auto sector, an official source told Reuters on Monday.

Angang Steel (0347.HK) gained 4.5 percent to HK$8.16. Credit Suisse upgraded the stock to outperform from neutral on Monday with a target price of HK$12.5 on likely improved Chinese consumption of steel in the second half of 2009.

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