HK shares rebound 6 pct, but China properties plunge

* HSBC rebounds after 2-day, 25 pct sell-off

* China properties mauled after Vanke earnings disappoint

* China Merchants Bank falls ahead of earnings

(Updates to midday)

By Parvathy Ullatil

HONG KONG, Oct 28 (Reuters) - Hong Kong shares gained 6.1 percent on Tuesday, bouncing off a five-day, 28 percent rout, led by HSBC (0005.HK), but Chinese property stocks slid on gloomy earnings from the country's biggest listed developer.

The main index is still 63 percent off its all-time high hit last October and down 58 percent so far this year.

"This a just a short-term rebound. The index could gain up to 1,000 points only to fall right back again," said Patrick Shum, strategist with Karl Thomson Securities.

"The fundamentals are not looking good at all and private equity funds and hedge funds are cashing out. There is also talk that the people manging the mandatory provident funds are also starting to sell so they can buy back at a cheaper price."

Shares in Europe's largest bank, HSBC (HSBA.L), soared 9.3 percent to HK$81.95 after it shed 25 percent of its market value in the previous two sessions on growing signs of trouble in emerging markets.

But shares in property developer China Overseas Land Investment (0688.HK) slid 14.7 percent after Shenzhen-listed China Vanke (200002.SZ) posted a 13 percent drop in third-quarter earnings and said it would not be able to meet its previously set profit target.

Guangzhou R&F Properties (2777.HK) plunged 25.75 percent, building on Monday's massive 22.3 percent slide as support measures from the government failed to restore investor confidence in the sector. The stock fell to a new life low of HK$2.43 earlier.

The benchmark Hang Seng Index .HSI ended the morning session up 675.76 points at 11,691.60, after it plunged 12.7 percent on Monday.

"We don't know whether this is the fabled 'capitulation' because we have no idea just how far the hedge fund sector has to shrink," said HSBC analysts led by Kevin Gardiner, head of global equity strategy.

"...as we'd feared, there are few places to hide: the notion of 'decoupling' was always wishful thinking in a globalised equity market, and portfolio liquidation is further making a mockery of many sectoral and regional analyses."

Mainboard turnover stood at HK$30.7 billion ($3.9 billion) at midday.