* HSI -0.7 pct, H-shares -0.5 pct, CSI300 +1 pct
* Shanghai shares rebound on bargain-hunting
* Hong Kong extends losses to 2-month low
* Lenovo jumps 2.7 pct after IBM server deal
* CITIC 21CN surges 353 pct to record after takeover offer
By Yimou Lee
HONG KONG, Jan 24 (Reuters) - China shares were set for its first weekly gain in a month on Friday, led by financial and property sectors, as investor looked for bargains after liquidity concerns eased.
Hong Kong shares, however, extended the previous day's weakness and fell to their lowest in more than two months as investors remained concerned over China's economic recovery after a disappointing manufacturing survey on Thursday.
By midday, the CSI300 of the largest Shanghai and Shenzhen A-share listings rose 1 percent. The Shanghai Composite Index gained 0.9 percent to its highest since Jan 8 at 2,059.51 points.
They were up 3.5 and 2.7 percent for the week, respectively. If gains hold, this would be the first weekly gain in a month for Shanghai shares.
The Hang Seng Index was down 0.7 percent to its lowest since Nov. 14 at 22,583.91 points, while the China Enterprises Index of the top Chinese listings in Hong Kong fell 0.5 percent. For the week, they are now down 2.4 and 1.1 percent, respectively.
China's central bank moved to head off another destabilising cash squeeze on Tuesday with a big injection of cash, bringing down money market rates, though some investors remain cautious.
"There is some bargain hunting because valuations in the A-share market are pretty low," said Ben Kwong, KSI Asia Ltd's chief operating officer in Hong Kong.
"Concerns about the relatively high interbank rate and further tightening of liquidity still linger, so funds were mainly interested in news-driven stocks," Kwong said, adding that gains for the Shanghai index may be limited as investors take to the sidelines before the Lunar New Year holidays.
Chinese property and financial counters led gains among industry groups. China Vanke, the country's largest developer by sales, rose 4.5 percent in Shenzhen to a 3-week high, while rival Poly Real Estate gained 4 percent in Shanghai.
Shares in Chinese PC giant Lenovo Group Ltd jumped 2.7 percent after the company agreed to buy IBM Corp's low-end server business for $2.3 billion in a long-awaited deal.
Shares of CITIC 21CN Co. surged 353 percent to a record high after Chinese e-commerce giant Alibaba Group and Yunfeng Capital said they will buy control of the company for $171 million.