HK shares slide 2.1 pct; Shanghai stocks drift lower

HONG KONG, July 13 (Reuters) - Hong Kong shares fell sharply on Monday, hounded by speculation over a likely tightening of China's loose monetary policies, while stocks in Shanghai drifted lower on news of an impending massive new listing.

China Eastern Airlines (600115.SS) and Shanghai Airlines (600591.SS) jumped their 5 percent daily limits in Shanghai after China Eastern said it would acquire its smaller rival in a share swap worth 9 billion yuan ($1.3 billion), which would give the newly capitalised airline more than a 50 percent market share in China's financial hub. [ID:nSHA356830]

China Eastern's Hong Kong-listed shares (0670.HK) rose as much as 14.4 percent in early trade to an 11-month high. The H-shares later pared gains, but were still up 5.2 percent at HK$1.83.

Here are the index moves and top stocks on the move by midday

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HONG KONG

* The benchmark Hang Seng Index .HSI was down 2.1 percent at 17,343.71 led by Chinese bank stocks, while turnover languished at HK$27.9 billion.

* "Possible austerity measures from Beijing are a big concern for the market. There are those who believe the stimulus measures have created a bubble," said Linus Yip, strategist with First Shanghai Securities.

* The China Enterprises Index .HSCE, which represents top locally listed mainland Chinese stocks, had fallen 2.1 percent to 10,351.26.

* New listing Chigo Holdings (0449.HK), rose 26 percent in its debut trading session, but trimmed early sharp gains as the sell down in the broad market weighed.

The stock had risen to an early high of HK$3.12, a 37.4 percent increase over its issue price of HK$2.27. The retail portion of the HK$120.7 million issue by air-conditioning products manufacturer was 347 times oversubscribed.

* Carmaker Dongfeng Group (0489.HK) rose 3.2 percent, extending last week's gains, after June passenger car sales in China shot up 47.7 percent from a year earlier amid government stimulus measures to fuel consumption.

* China Unicom (0762.HK), which soared 7.6 percent last week on speculation the country's second-largest mobile services provider was close to a deal with Apple APPL.O to launch its iPhone in China, tanked on Monday as no details on the rumoured deal were forthcoming.

The stock was down 5.9 percent at HK$10.14.

* China Aoyuan Property (3883.HK) dropped after it said it would raise over HK$600 million through a share sale to its controlling shareholder to fund acquisitions and for working capital.

The stock was down 13.2 percent at HK$1.71, while the placement was priced at HK$1.73.