HK, China stocks flat, AgBank makes weak HK debut

* China Shipbuilding placement could weigh on Shanghai shares

* Fundraising concerns, worries about China economy drag

* Zijin at 17-mth low after company forced to halt production (Updates to close)

By Sui-Lee Wee and Chen Yixin

HONG KONG/SHANGHAI, July 16 (Reuters) - China's key stock index ended flat on Friday in thin volume, rebounding from a decline in the morning but capped by further signs that big corporate fundraisings would continue to keep a lid on share prices.

Stocks in Hong Kong also ended flat as bargain-hunting in heavyweights such as HSBC Holdings (0005.HK) was restrained by a weak market debut for Agricultural Bank of China (1288.HK) and fears of slowing economic growth in China.

The benchmark Hang Seng Index .HSI ended down 0.03 percent or 5.46 points at 20,250.16. The China Enterprises Index .HSCE of top locally listed mainland Chinese stocks closed down 0.07 percent at 11,419.62.

Turnover hit a three-week high of HK$ 61.3 billion ($7.89 billion), compared with Thursday's HK$55.6 billion.

Agricultural Bank of China edged up 2.2 percent from its HK$3.20 issue price. Its Shanghai-listed shares rose less than 1 percent on their first day of trade on Thursday. [ID:nSGE66E0CI]

But even with the massive AgBank initial public offering out of the way, the market would have little room to recover, dealers said.

"Investors are treading water to cross the river," said Jackson Wong, an investment manager at Tanrich Securities. "There's a lot of uncertainty. Data from China showed the economy did slow in the second quarter and it seems the economy will slow down more in the third and fourth quarters. In light of this, people won't make big bets."

But other investors took heart from news that China would stick to an appropriately loose monetary stance and a proactive fiscal policy. Premier Wen Jiabao made the comments on Friday, a day after China reported cooling growth in the second quarter. [ID:nBJC002602]

"The announcement today that China will continue to implement an accommodative monetary policy is very encouraging," said Andy Lam, strategist at Harris Fraser. "That means there will be no further increase in bank reserve ratios. That also means there could be no rate rise this year."

For the week, Hong Kong's index has fallen 0.6 percent. The charts show near-term resistance for the Hang Seng Index at 20,800, which was last hit on June 28. Key support could be between 19,000 to 20,000, dealers said.

AgBank's soft debut bodes ill for upcoming fundraisings by peers including Industrial and Commercial Bank of China (1398.HK) (601398.SS) and Bank of China (3988.HK)(601988.SS), which are returning to capital markets to raise tens of billions of dollars to supplement their capital.

Zijin Mining Group Co (2899.HK) hit a near 17-month low after the company was ordered to halt production after waste water discharges from its copper mine polluted a river and reservoir in Fujian province, the China Business News reported on Friday. [ID:nTOE66F009]

Zijin, among the most actively traded stocks in Hong Kong, was down 3.7 percent.

Index heavyweight HSBC rose 1 percent.

SHANGHAI FLAT

In Shanghai, China Shipbuilding Industry Co (601989.SS) announced a private share placement worth 17.3 billion yuan ($2.6 billion), adding more funding pressure to the market. The stock was the second-most active counter and the biggest loser on the Shanghai market falling near its 10 percent daily limit.

The Shanghai Composite Index .SSEC ended at 2,424.271 points after closing down 1.9 percent on Thursday, the biggest percent fall in two weeks, as AgBank (601288.SS) disappointed with a lacklustre Shanghai debut. The index has dropped 1.9 percent this week.

China's stock market is one of the world's worst performers, down 26 percent this year and second only to Greece after Beijing put in place a range of policies to cool the mainland's red-hot property sector. The Hong Kong market has fallen 7.5 percent.

"The index does not have a clear direction," said Zheng Weigang, an analyst at Shanghai Securities. "We expect it may still trade narrowly in the coming week."

Volume weakened, reflecting waning investor appetites for A shares, falling to 56 billion yuan ($8.26 billion) from Thursday's 72 billion yuan.

AgBank, the most active stock closed down 0.4 percent at 2.69 yuan, trading around its IPO price. [ID:nTOE66E08A] (Additional reporting by Jun Ebias, Editing by Chris Lewis)