Hong Kong shares slip from 17-month high, China sinks again
* HSI -0.3 pct, H-shares -0.4 pct, CSI300 -0.8 pct
* Cyclicals weak ahead of expected Fed tapering decision
* Wing Hang Bank leads Hong Kong up after takeover offer
* Prada slips ahead of interim earnings
HONG KONG, Sept 17 (Reuters) - Hong Kong shares slipped from a 17-month high in early Tuesday trade, with mainland Chinese markets also weaker, ahead of a U.S. Federal Reserve meeting where it is widely expected to start cutting its stimulus.
Wing Hang Bank bucked index weakness, leading gains among Hong Kong banks after it said controlling shareholders have received preliminary offers from independent third parties to purchase their $3.3 billion stake.
At the midday break, the Hang Seng Index was down 0.3 percent at 23,189.2 points after closing on Monday at its highest since May 22. The China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.4 percent.
The CSI300 of the leading Shanghai and Shenzhen A-share listings sank 0.8 percent, while the Shanghai Composite Index shed 0.9 percent.
If losses hold, this will be the third-straight daily fall for the mainland indexes, which closed at 14-week highs on Thursday. Both are still up 7.5 percent from a trough on Aug. 23, the day after Beijing approved a Shanghai free trade zone.
Official data in the morning showed China drew $8.4 billion in foreign direct investment in August, up 0.6 percent from a year ago. Data for August home prices is due on Wednesday.
Market watchers expect mainland markets to stay on the defensive ahead of the Mid-Autumn Festival holiday this Thursday and Friday. Hong Kong will be closed on Friday for the holiday.
"It's a waiting game at the moment, but the FOMC decision may not necessarily be a bad thing," said Linus Yip, a strategist at First Shanghai Securities. He was referring to the Federal Open Market Committee, the policymaking arm of the U.S. Federal Reserve.
"Tapering stimulus also means the U.S. economy is recovering, which I suspect some smart money has started to position for," Yip added. The Fed is expected to release its decision at 1800 GMT Wednesday.
On Tuesday, growth-sensitive plays were broadly weaker. Chinese oil giant CNOOC shed 1.5 percent as Brent crude oil futures edged lower after recording its sharpest drop in three months on Monday.
Chinese banking plays, which had powered the rally in the first half of September, again were weaker. Shanghai Pudong Development Bank sank nearly 3 percent. Still, the stock is up almost 33 percent since Aug. 23.
Shenzhen-listed China Merchant Property tumbled 8.2 percent as trading resumed after being suspended on Aug. 7. Official media reported that the developer plans to issue 181 million new shares to raise about 6.5 billion yuan to acquire Shekou Industrial Zone.
Wing Hang Bank surged 40.2 percent, earlier testing a record high intra-day level, after becoming the second Hong Kong family-run bank to receive a takeover offer in as many months. Its gain lifted the shares of rivals.
Shares of Chong Hing Bank, the first to have gotten an offer, climbed 2.5 percent, while Dah Shing Bank surged 18.6 percent and its majority stakeholder Dah Shing Financial Holdings 9.5 percent. Bank of East Asia rose 3.8 percent.
Italian luxury brand Prada lost 0.6 percent ahead of its earnings later Tuesday. It is expected to report a 12 percent rise in profit for the six months ended July, largely due to sales growth in China, which analysts see at almost 12 percent.
Prada, up 7.8 percent year to date, is now trading at 23.4 times forward 12-month earnings, a 7 percent premium to its historical median, according to Thomson Reuters StarMine.
Kingway Brewery said it will distribute a special dividend of HK$1 per share after completing the sale of brewery assets. It said trading in the stock, suspended on Monday morning, will resume in the afternoon.