HK shares rebound 2.3 pct after 2-day drop;PCCW slides

* PCCW slumps after buyout deal scuttled

* Cement makers surge on CNBM earnings, outlook

* HSBC partly recovers from 2-day, 6.7 pct sell-off

(Updates to close)

By Parvathy Ullatil

HONG KONG, April 23 (Reuters) - Hong Kong shares ended 2.3 percent higher on Thursday as blue-chips across the board recovered from a two-day slump, but PCCW slid after a privatisation proposal by the company was struck down.

PCCW (0008.HK), Hong Kong's dominant fixed-line operator, dropped 13.1 percent to HK$3.58 after it said it would not extend a key deadline for its $2.2 billion privatisation plan.

The stock opened 17.5 percent lower as trading resumed a day after a court blocked the buyout. The court ruled in favour of the city's securities watchdog, which alleges vote-rigging in the deal.

PCCW also declared a special dividend of HK$1.30 per share to be paid on or around May 18, in lieu of any final dividend for the 2008 fiscal year.

The benchmark Hang Seng Index .HSI was up 336.01 points at 15,214.46 after dropping 5.5 percent in the previous two sessions.

HSBC (0005.HK) rose 2.5 percent after dropping 6.7 percent in the last two session as worries about bad assets at U.S. banks hit the headlines again.

"Some may argue the two-day sell-off was overdone but with things looking pretty quite in Shanghai I expect the index to stay below 16,000 points in the near-term. There is really new news to trade up on," said Peter Pak, vice president with BOCI Research.

Caution is also expected to reign with results to the stress tests on U.S. banks, designed to see how the country's largest banks would fare if the U.S. recession proved unexpectedly severe, due on May 4.

Turnover shrank to HK$52.6 billion from Wednesday's HK$67.9 billion.

The China Enterprises Index .HSCE of top mainland companies was 2.5 percent higher at 8,939.09 with China Life (2628.HK) gaining 4 percent ahead of its first-quarter earnings later on Thursday.

Cement makers continued their strong surge after China National Building Materials (3323.HK) (CNBM) said sales in the first quarter rose 72 percent under the country's infrastructure-focused stimulus measures.