HK shares drop in broad slump; China shares inch up

* Chinese property stocks soar on strong May sales

* HK's Li & Fung falls on German retailer Arcandor's woes

* China financials jump in Shanghai on M&A possibilities

By Parvathy Ullatil & Claire Zhang

(Updates to close)

HONG KONG, June 8 (Reuters) - Hong Kong shares succumbed to profit-taking on Monday as investors digested mixed signals from the U.S. economy and held their breath for a raft of economic data from China and the United States this week.

But China-listed shares edged up, with financials helped by news of a possible tie-up between two heavyweights and property counters buoyed by strong sales in May.

"There has been a lot of uncertainty since the U.S. jobs data came out on Friday," said Andrew Sullivan, sales trader with MainFirst Securities in Hong Kong.

"The general lack of willingness to sell among investors has made things difficult for fund mangers who are looking to take profit. The U.S. data on Friday again didn't set a clear direction."

Data on Friday showed U.S. employers cut 345,000 jobs in May -- substantially less than analysts had forecast -- but the U.S. unemployment rate hit 9.4 percent, its highest since 1983.

Newsflow over the weekend rekindled worries over the financial strength of companies in recession-hit economies. Hong Kong based consumer goods supplier Li & Fung (0494.HK) dropped 5.2 percent on uncertainity over the fate of a customer, German retailer Arcandor (AROG.DE). [ID:nBAT003007]

CHINA PROPERTY STOCKS CELEBRATE STRONG SALES

Property shares were strong, with China Vanke (000002.SZ), the country's biggest-listed property developer, climbing 4.2 percent to 11.14 yuan after saying its May property sales rose 19.7 percent from a year earlier to 6.41 billion yuan ($937.5 million). The figure was up 22 percent from April's 5.27 billion yuan. [ID:nSHA37877]

In Hong Kong, China Overseas Land (0688.HK) bucked the trend in the broad market to rise 2 percent to HK$16.42 after the top Chinese property developer said its property sales in May soared 113.9 percent from a year earlier to HK$5.65 billion (US$724 million).

Smaller rival Greentown China (3900.HK) piled on 3.6 percent to HK$10.30 after recording a 193 percent jump in May sales to 6.2 billion yuan from a year earlier. Greentown said the average contract selling price for the first five months rose 12 percent year on year to 11,251 yuan per square meter.

Hong Kong-based property developers sank on Monday after property transactions fell 77 percent from last week amid a lack of new launches, according to local newspaper reports. Top developer Sun Hung Kai Properties (0016.HK) dropped 5.5 percent, to HK$95.40 while Li Ka-shing's property flagship Cheung Kong (0001.HK) fell 3.8 percent.