HK eases, China shares reverse course to end firmer

* HSI down on profit-taking; to remain between 21,000-22,000

* Shanghai index rebounds on retailer strength

* U.S. dollar rebound triggers selling of risky Asian assets
* MCC, world's second-biggest IPO of 2009, up 28 pct
(Updates to close)

By Nerilyn Tenorio and Claire Zhang

HONG KONG/SHANGHAI, Sept 21 (Reuters) - Hong Kong shares
caved in to profit-taking pressure and ended 0.7 percent lower
after hitting highs last week, while Shanghai stocks finished 0.2
percent firmer as retailers helped reverse earlier losses.

The rebound in the U.S. dollar in afternoon trade triggered
selling of risky assets in Asia, including Hong Kong, which helped
pull the bourse down in late trade, analysts said.

"That surprised the Hong Kong market a bit," said Jackson
Wong, investment manager at Tanrich Securities.

But to put things in perspective, analysts said closing
levels were little changed compared with Friday's prices, and
Wong said the market would remain in a consolidation range of
21,000-22,000 points during the rest of the week.

"The Hang Seng index had been up too much. We we're going
ahead of the A-share market. And today, when traders found no
particularly good news to trade on, the market came under some
profit-taking pressure," Wong said.

Analysts said investors still enjoyed a generally positive
trading environment, with China's monetary and fiscal measures
seen supportive of the market ahead of the National Day
celebrations from Oct. 1.

"The mainland government wouldn't want to spoil the fun ahead
of National Day," Steve Cheng, associate director at Shenyin
Wanguo Securities in Hong Kong, said earlier in the day.

After hitting a 13-month high above the 21,700-point level
last Thursday and easing slightly on Friday, Hong Kong's
benchmark Hang Seng Index .HSI closed 150.6 points lower at
21,472.85, with turnover at HK$57.5 billion.

The China Enterprises Index .HSCE, which represents top
locally listed mainland Chinese stocks, dropped 1.56 percent to
12,418.34.

Banks fell following last week's rally on ample liquidity,
with index heavyweight HSBC (0005.HK) giving up early gains and
slipping 0.27 percent to HK$90.95, while China's leading bank
ICBC (1398.HK) retreated 2.27 percent.

Galaxy Entertainment (0027.HK) rallied 9.54 percent after two
casino executives said China had eased its restrictions on travel
to Macau by residents of China's Guangdong province.

Two casino sources told Reuters that China had quietly begun
relaxing restrictions for its citizens from Guangdong travelling
to Macau, leading to a strong showing for casinos so far this
month and big hopes for October [ID:nHKG158012].

Melco International Development (0200.HK), parent of casino
operator Melco Crown Entertainment Ltd (MPEL.O), jumped 7.71
percent to HK$5.87 after the company said on Sunday that it would
sell its remaining 160.9 million shares, or 43.24 percent of the
issued share capital of securities broker Value Convergence
(0821.HK) at a discounted HK$1.92 each to third party investors.

FIRM MMC DEBUT

China's key stock index closed up 0.2 percent on Monday, with
retailers helping to reverse earlier sharp losses, while
Metallurgical Corp of China's (MCC) (601618.SS) listing debut
bolstered sentiment.

Trading was initially hit by worries over supply as the stock
regulator was seen pushing more shares into the market, having
approved more than a dozen companies for second-board listings on
China's Nasdaq-style bourse in Shenzhen.

The Shanghai Composite Index .SSEC closed at 2,967.011
points, bouncing off a fall of more than 3 percent in the
morning. The index sank 3.2 percent on Friday.

Gaining Shanghai A shares outnumbered losers by 580 to 281,
while turnover dropped to a one-week low of 145 billion yuan ($21
billion) from 181 billion yuan on Friday.

MCC, the Chinese construction and engineering company that
completed the world's second-biggest initial public offering
(IPO) this year, closed at 6.94 yuan, or 28 percent higher, on
its first day of trade in Shanghai, near the top of analysts'
expectations of between 6 and 7 yuan.

Retailers were strong ahead of the week-long National Day
holiday, with Beijing Xidan Department Store (600723.SS) racing
up its 10 percent daily limit to 10.55 yuan.

"Trading volume became less active ahead of the week-long
holiday, with the index expected to fluctuate around its key mark
of 3,000 points," said the chief strategist at Hongyuan
Securities in Beijing.

He added that the index may move in a narrow range as the
economic recovery was on a solid track, stock valuations were
generally in line with earnings, which could limit the index's
fall, while the outlook for more share supply could put a cap on
the market's rebound.

The average premium of Shanghai A shares over Hong
Kong-listed H shares of the same companies .HSCAHPI fell as low
as 12.2 percent on Monday, near the lowest level of 11.9 percent
for the year hit in January.

Ten companies to be listed on China's second board said on
Monday that they would take investor subscriptions this week.
[ID:nSHA170979]

"The subscriptions came much faster than investor
expectations of at least after the National Day holiday,
weakening sentiment," said Wen Lijun, an analyst from Nanjing
Securities.

Fortis Haitong Investment Management Co Ltd said valuations
of second-board shares were relatively higher but the size of the
fundraising was smaller. Institutions are expected to adopt a
wait-and-see stance and were not expected to actively
participate.

Wen mentioned bearish factors such as more fundraising and
looming share supply as encouraging profit-taking, but also noted
that the index could consolidate around technical support.

Analysts said the index may find initial support at its
125-day moving average now at 2,840 points.
(Reporting by Nerilyn Tenorio; Editing by Chris Lewis)