Shanghai stocks snap 6-day winning streak but Hong Kong firms

* Shanghai down 0.5 pct, snaps 6 days of gains

* Hang Seng up 0.64 pct, hits key resistance level

* Large-cap shares lead gains in HK ahead of futures expiry

* Tourism counters up in China on expected rise in visitors (Updates to close)

By Vikram S Subhedar and Farah Master

HONG KONG/SHANGHAI, July 27 (Reuters) - China's key stock index fell on Tuesday as investors booked profits after six straight sessions of gains, wary about whether the battered market can make a sustained break higher.

Hong Kong's Hang Seng index .HSI rose 0.6 percent, extending a five-day winning streak, with large cap stocks leading gains ahead of the expiry of July futures contracts.

The Shanghai Composite Index .SSEC ended at 2,575.4, after closing up 0.7 percent on Monday, snapping a rally inspired by hopes that China would maintain stable economic policies or possibly even ease policy tightening in the second half of the year.

Financials were laggards after news of yet more fundraising in the sector offered investors a reason to take profits.

The China Securities Regulatory Commission said it would review an IPO application for ShanXi Securities, but analysts said new issuances were unlikely to halt market gains substantially.

"After Agricultural Bank's huge listing, other listings are not likely to unsettle the market much. Today's fall is because there is a need for some technical adjustment, this is normal," said Wen Lijun, analyst at Nanjing Securities.

Large fundraisings such as Agricultural Bank of China's (601288.SS) massive IPO earlier this month have weighed on Shanghai stocks along with Beijing's repeated clampdowns on the speculative property sector. Together they have triggered a near 30-percent drop in the index this year, until the recent rebound.

Wen said in the near term the index could extend its recent rally to 2,800 points on optimism that Beijing would seek to bolster growth for the rest of the year and forgo any more tightening measures.

Tourism stocks outperformed, boosted by media reports that China would increase development in the travel industry and relax controls over the entry of foreign visitors.

Bucking the broader index's fall, Kunming Horti-expo Garden Co 002059.SZ jumped its 10 percent daily limit, while Tibet Tourism Co (600749.SS) rose 3 percent.

Industrial and Commercial Bank of China (601398.SS), the second-largest capitalised stock, dropped 0.9 percent. This week has seen renewed concern about non-performing loans at Chiense banks following last year's record lending binge, especially those made to local government financing vehicles. [[ID:nTOE66Q05N]

LARGE CAPS RISE IN HK

In Hong Kong, the near-month futures contract on the Hang Seng HSIc1 rose to 20,964, close to its highest level in over a month, ahead of expiry of the July series on Thursday.

Large cap stocks gained as traders adjusted positions ahead of the expiration, with internet firm Tencent (0700.HK) the top gainer, rising 3.4 percent, followed by steel-to-property congolmerate Citic Pacific (0267.HK), which rose 3 percent.

Shares of index heavyweight HSBC (0005.HK) rose 1.7 percent.

"This looks like a momentum-driven rally now, with people chasing stocks that have lagged the rally," a Hong Kong-based equity salestrader said.

Shares of Tencent were down about a percent over the past five sessions, compared with a 3.7 percent rise in the Hang Seng.

Strong earnings from bellwether U.S. multinationals have spurred a return to riskier assets globally, though investors remain cautious after a string of weak economic data from the United States. [ID:nSGE66Q05T]

The Hang Seng closed at a key resistance level on Tuesday, hitting its 250-day moving average. The next major resistance for the index is at its 200-day moving average, currently at 21,065.27.

Investors will now focus on the upcoming interim reporting season for blue-chip companies and Wednesday's government land auction, analysts said.

Luxury property prices in the city are expected to rise sharply if a prime site in the Peak area of Hong Kong is sold for HK$11.4 billion ($1.48 billion), at the top of a forecast range, in a land auction on Wednesday, according to a report in the South China Morning Post newspaper.

Shares of China State Contruction International Holdings (3311.HK) rose 5.7 percent to its highest in more than seven months after reports that it had successfully bid for a number of government projects in Hong Kong valued at about HK$3 billion ($386 million). (Editing by Kim Coghill)