China stocks finish at 1-yr high; HK shares rebound

* HK shares bounce off one-month low in thin volume

* China steel stocks soar on iron ore deposit discovery

* Shanghai Composite Index headed for 3,300 pts, brokers (Updates to close)

By Parvathy Ullatil & Claire Zhang

HONG KONG, June 24 (Reuters) - Chinese stocks rose 1.02 percent to a one-year closing high on Wednesday, led by metal and steel shares, as more signs pointed to an economic recovery.

Hong Kong shares outperformed the region with a 2 percent jump, with advancing stocks outnumbering decliners 3:1, but turnover slid to a one-month low ahead of the outcome of the U.S. Federl Reserve meeting.

Steel stocks outshone the broad market after China said it had discovered Asia's biggest iron ore deposit in Liaoning province, just as Chinese steel mills entered the final round of negotiations over pricing with global ore suppliers.

Baoshan Iron and Steel (600019.SS), China's largest steelmaker, climbed 3.0 percent to 7.2 yuan, while Bengang Steel Plates (000761.SZ), whose parent, Benxi Iron & Steel, owns a share in the deposit, surged by its 10 percent daily limit to 7.48 yuan.

Hong Kong-listed Angang Steel (0347.HK) whose base of operation neighbours the deposit rose 5.3 percent to HK$13.06.

TURNOVER DRIES UP IN HONG KONG

The benchmark Hang Seng Index .HSI closed up 353.78 points at 17,892.15 after vacillating ahead of results of the U.S. Federal Reserve meeting.

Some of the gains could also be attributed to index futures-related trading, said brokers, ahead of the contract expiry next Monday.

Turnover slowed to a one-month low of HK$56.7 billion from Tuesday's HK$66.2 billion.

"Investors are unwilling to take sides after the whipsaw action we have been seeing in recent days," said Alex Wong, director with Ample Finance.

Wong said he expected the main index to climb above 18,000 points on Thursday, but saw a strong resistence at 18,400 points, the previous support for the the gauge.

"There is also concern over what the Fed will have to say about interest rates later," he said.