China shares gain on solid earnings, data; HK slips

* China posts biggest gain in more than three weeks

* Hong Kong narrows losses after China gains
(Updates to close)

By Jun Ebias and Claire Zhang

HONG KONG/SHANGHAI, Nov 2 (Reuters) - China's key stock index
rose 2.7 percent on Monday, its biggest one-day gain in more than
three weeks, as solid earnings and upbeat manufacturing data
powered a sharp rebound from early weakness.

But the Nasdaq-style ChiNext <0#CHINEXT.SZ> market for
start-up stocks, which began trade last Friday with a speculative
surge, was broadly weaker as profit taking sent about two-thirds
of its 28 stocks down by their 10 percent daily limit.

In Hong Kong, shares narrowed losses as gains in China
encouraged some bargain hunting, but exporter Li & Fung (0494.HK: Quote, Profile, Research)
slumped on gloomy U.S. consumer sentiment.

The Shanghai Composite Index .SSEC ended at 3,076.649
points after sliding as far as 2,923.525, a nearly three-week
intraday low, and below the closely watched 125-day moving
average now at 2,940 points.

Gaining Shanghai A shares overwhelmed losers by 880 to 17,
while turnover picked up to a one-week high of 154 billion yuan
($22.55 billion) from Friday's 117 billion yuan.

"The market is apparently being propelled by strong
thrid-quarter earnings, with banks outperforming for that
reason," said Zhang Qi, senior analyst at Haitong Securities in
Shanghai. "But with negative factors looming, such as weak
overseas markets, the market is not likely to stage a steady
rally but will rise gradually amid volatility."

Shenzhen Development Bank 000001.SZ jumped by its 10
percent daily limit to 24.73 yuan, while Ping An Insurance
(601318.SS: Quote, Profile, Research) advanced 6.7 percent to 59.71 yuan.

The market earlier tracked losses in New York stocks, which
on Friday posted their biggest one-day fall since July, but
investors shifted their focus to the recovering Chinese economy.

HSBC's China Purchasing Managers' Index (PMI) for October,
released in the morning, rose to an 18-month high of 55.4 from
55.0 in September, underscoring the strength of the manufacturing
sector. [ID:nSEO80466]

The official PMI, released on Sunday, rose to an 18-month
high of 55.2 in October from 54.3. [ID:nPEK81136]

Auto shares rose, cheered by upbeat results. Chongqing
Changan Auto 000625.SZ gained 7.43 percent to 14.02 yuan after
reporting a 145 percent rise in net profit.
SAIC Motor Corp (600104.SS: Quote, Profile, Research), China's largest carmaker,
advanced 6.29 percent to 24.68 yuan after reporting a ninefold
jump in its third-quarter net profit. [ID:nSHA324757]

Health-related shares rose after Premier Wen Jiabao warned
about the spread of H1N1 influenza. [ID:nPEK74552]

Shenzhen Neptunus Bioengineering 000078.SZ advanced by its
10 percent daily limit to 20.35 yuan.

Companies that may benefit from a proposed Walt Disney Co
(DIS.N: Quote, Profile, Research) theme park in Shanghai outperformed after Shanghai Mayor
Han Zheng said over the weekend that the city would soon hold a
news briefing on the project. [ID:nHKG354940]

Shanghai Lujiazui Finance & Trade Zone Development
(600663.SS: Quote, Profile, Research) rose 8.94 percent to 30.47 yuan. Shanghai Jielong
Group Industry (600836.SS: Quote, Profile, Research) climbed by its 10 percent daily limit
to 18.57 yuan.
HONG KONG NARROWS LOSSES

The benchmark Hang Seng Index .HSI ended down 0.61 percent
or 132.68 points at 21,620.19, after losing 2.57 percent at the
opening. Turnover was HK$65.12 billion ($8.4 billion), down from
Friday's HK$76.35 billion.

"Hong Kong is drawing strength from the recovery in the
Chinese market, which eased selling pressure stemming from weak
sentiment in the U.S.," said Castor Pang, research director at
Cinda International.

Li & Fung (0494.HK: Quote, Profile, Research) declined 3.65 percent and Esprit Holdings
(0330.HK: Quote, Profile, Research) lost 1.62 percent, as U.S. consumers' gloomy economic
outlook weighed on exporters.

Local developers Sino Land (0083.HK: Quote, Profile, Research) fell 2.39 percent and
New World Development (0017.HK: Quote, Profile, Research) slipped 1.88 percent. Chief
Executive Donald Tsang told businessmen on Monday that the
government wanted to avoid a property bubble. [ID:nHKG123609]

Chinese offshore oil and gas producer CNOOC Ltd (0883.HK: Quote, Profile, Research)
shed 1.16 percent, after sliding as low as 3.33 percent, on
easing crude oil prices. PetroChina (0857.HK: Quote, Profile, Research) shed 1.25 percent.

Chinese property developer Yuzhou Property (1628.HK: Quote, Profile, Research) recouped
some losses and ended down 0.7 percent at its trading debut in
Hong Kong. The stock ended the midday session 4.8 percent lower.

The China Enterprise Index .HSCE of top locally listed
mainland Chinese stocks was down 0.22 percent at 12,741.88. It
opened down 2.82 percent.

Bucking the trend, Tencent Holdings (0700.HK: Quote, Profile, Research), which operates
popular online games in China, rose 4.38 pecent. Credit Suisse
raised its target price to HK$153.60 from HK$131.60 and kept its
"outperform" rating.

Nine Dragons (2689.HK: Quote, Profile, Research) was up 3.87 percent. The packaging and
papermaker's plan to use proceeds from the sale of new shares to
pay off debt would help lift profit, analysts said.

Chinese ingot and wafer maker Comtec Solar (0712.HK: Quote, Profile, Research), which
debuted in Hong Kong on Friday, extended its fall, down 8.59
percent. The stock closed 5.7 percent lower on Friday on concerns
that demand for its products would remain weak.
(Editing by Chris Lewis)