HK stocks fail to end above 23,000; China at 3-mth closing high

* HK shrs briefly pass 23,000 for first time in over a yr

* China stocks at 3-mth closing high

* China Merchants Securities closes up 8 pct in debut
(Updates to close)

By Sui-Lee Wee and Claire Zhang

HONG KONG/SHANGHAI, Nov 17 (Reuters) - Hong Kong's benchmark
index failed to close above the 23,000 level on Tuesday after
Beijing rebuffed calls for the yuan to rise, but China's stocks
reached three-month closing highs, propped up by a financial pact
signed between Taiwan and China.

Hong Kong's benchmark Hang Seng Index closed down 0.13
percent, or 29.83 points, at 22,914.15, after opening at
23,000.37 points.

The index's milestone, which was last reached on July 24,
2008, is a symbol of how far the market has come since last year
when investors shunned stocks due to the global financial crisis.

While many brokers said the index could breach 23,000 points
again, they say it will likely trade in a narrow range as
investors consolidate gains from a two-day rally.

"We should have a correction over the next few days until the
22,000 level," said Francis Lun, a general manager with Fulbright
Securities.

"Everybody was expecting the renminbi to appreciate, but
there's news from the mainland that China will resist the
appreciation, which means that hot money could be leaving," he
said.

Hong Kong and China stocks had rallied on Monday as
expectations of yuan appreciation on the visit of U.S. President
Barack Obama to the mainland fuelled buying for yuan-related
assets.

The yuan fell against the dollar in key offshore
non-deliverable forwards (NDFs) on Tuesday after the Chinese
central bank set a stable reference rate, showing its resolve not
to yield to pressure for the yuan to appreciate. [ID:nSHA205809].

"The market seems to be directionless because most investors
feel that 23,000 is the psychologically resistant level," said
Castor Pang, research director at Cinda International. "At this
moment, investors are unwilling to buy."

Turnover fell to HK$71.6 billion ($9.24 billion), from
Monday's HK$76.36 billion.

The China Enterprises Index .HSCE of top locally listed
mainland Chinese stocks slipped 0.14 percent to 13,732.05.

China Metal Recycling (Holdings) (0773.HK) fell as much as 45
percent to a four-month low of HK$6.17 after it said an executive
director had resigned. The firm, which was the top loser and
among the most actively traded stocks in Hong Kong, finished down
24 percent at HK$8.57.

Meadville Holdings Ltd 3313.HK jumped as much as 48
percent to a record of HK$3.18 after printed circuit board maker
TTM Technologies Inc (TTMI.O) agreed to buy its printed circuit
board business for $521 million. [ID:nBNG417242]. The stock,
which was the top percentage gainer in Hong Kong, closed at
HK$3.05, up 42 percent.

SHANGHAI AT HIGHEST 3-MTH CLOSE

China's key stock index edged up 0.24 percent to its highest
close in three months, supported by the banking sector after
Taiwan and China inked a financial pact, while China Merchants
Securities Co (600999.SS) staged a soft debut as investor fervour
toward IPOs waned.

The Shanghai Composite Index .SSEC ended at 3,282.889
points after touching a fresh three-month intraday high of
3,298.379, although the market lost some of its steam after
storming higher on Monday in the biggest one-day gain in more
than a month.

Gaining Shanghai A shares outnumbered losers by 498 to 374
while turnover eased to 193 billion yuan ($28.28 billion) from
Monday's three-month high of 226 billion yuan.

Shanghai's index of U.S. dollar-denominated B shares .SSEB
ended up 2.69 percent at 256.976 points, driven by their low
valuations compared with A shares.

"The index is taking a break after yesterday's strong gain
and as it approaches the next round figure at 3,300 points," said
Zhou Lin, senior analyst at Huatai Securities in Nanjing.

"The bulls and the bears are battling it out, but the uptrend
remains intact for the short term."

The official China Securities Journal cited analyst forecasts
that the index would head for its 2009 peak of 3,478 points in
coming weeks, propelled by China's strong economic recovery and
improving corporate earnings.

"The market is strong and healthy. Profit-taking has not
stopped the uptrend," said Chen Shaodan, senior analyst at
Stockfly Securities in Beijing.

China Merchants Securities, which raised 11.1 billion yuan in
an initial public offering, ended its first day of trade at 33.61
yuan, up a weaker-than-expected 8.42 percent from its IPO price
in the worst first-day performance by a newly listed mainland
stock since a 10-month suspension of IPOs was lifted in June.
[ID:nSHA199651]

The heavily weighted banking sector supported the index, with
Bank of China (601988.SS) rising 0.70 percent to 4.30 yuan after
saying it was ready to open a branch in Taiwan and would apply
for regulatory approval as soon as possible, just a day after
Taiwan and China signed a financial services pact.
[ID:nPEK201714] [ID:nTP200826]

China's top TV maker, TCL (000100.SZ), raced up its 10
percent daily limit to 4.57 yuan after it announced a joint
venture to invest 24.5 billion yuan in an advanced production
line to make liquid crystal displays for flat-screen TVs. TCL's
shares had been suspended since Nov. 4, during which time the
index gained nearly 5 percent. [ID:nTP199720]

(Editing by Ken Wills)