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ZTE shares down over 3 percent after U.S. Congress report

HONG KONG, Oct 8 (Reuters) - Shares of ZTE Corp , China's second-largest telecom equipment maker,fell by more than 3 percent after a U.S. Congress report saidthe company and its bigger Chinese rival, Huawei, should be keptfrom the U.S. market due to security reasons.

ZTE's Hong Kong-listed shares fell by as much as 3.4 percentto HK$12.94 on Monday, underperforming the main Hang SengIndex's 0.2 percent decline.

China's top telecommunications gear makers should be keptfrom the U.S. market because they cannot be trusted to dodgeChinese state influence and thus pose a security threat, theU.S. House of Representatives' Intelligence Committee leaderssaid in a draft of a report to be released Monday.

(Reporting by Lee Chyen Yee; Editing by Anne Marie Roantree)

((chyenyee.lee@thomsonreuters.com)(852)(2843-6901)(Reuters

Messaging: chyenyee.lee.reuters.com@reuters.net))

Keywords: ZTE/SHARES

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