HK, Shanghai shares rebound on Wall St rally

HONG KONG, July 14 (Reuters) - Hong Kong stocks rebounded from a seven-week low on Tuesday after strong gains on Wall Street spurred bargain-hunting in banks and financials, but traders said the rally could fizzle out as fears about the broader economy weighed.

Shares in Shanghai came close to a 13-month intraday peak struck on Friday, boosted by solid gains in overseas stocks and hopes for an improving earnings outlook.

In Hong Kong, banks and financial issues gained as investors looked for laggards, particularly after influential financial analyst Meredith Whitney's bullish outlook for bank earnings boosted U.S. stocks. [ID:nBNG121776]

HSBC (0005.HK) contributed the most to the rise of the benchmark index, advancing 2.9 percent to HK$63.10. Chinese lender Construction Bank (0939.HK) gained 2 percent to HK$5.54, Bank of China (3988.HK) rose 2.6 percent to HK$3.51, and ICBC (1398.HK) was up 2.4 percent at HK$5.04.

Chinese insurer China Life (2628.HK) climbed 2.5 percent to HK$30.40.

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

HONG KONG

* The benchmark Hang Seng Index .HSI rose 2.36 percent or 406.38 points to 17,661.01. Turnover dropped to HK$25.4 billion, from HK$27.9 billion at the midday close on Monday, indicating that some investors were cautious about the market outlook.

* "The market lacks direction and momentum," said Peter Lai, a director with DBS Vickers. "Investors are holding a wait-and-see attitude and volumes remain weak. We could experience a correction in the third quarter."

* Dealers are looking ahead to data on U.S. retail sales and corporate earnings later this week for indications of corporate health in the world's largest economy.

* The China Enterprises Index, which represents top locally listed mainland Chinese stocks, had risen 2.43 percent to 10,528.95.

* Tsingtao Brewery (0168.HK) surged 6.3 percent to a 17-month high of HK$26.10 after the brewer said it expected first-half profit to increase 60-70 percent year on year. [ID:nHKG49805]

* Shimao Property (0813.HK) rose 2.1 percent after it said its 64.21 percent-owned unit Shanghai Shimao (600823.SS) would issue up to 150 million A shares, raising about 2 billion yuan ($292.7 million) to fund development projects in Qingdao, Jiangsu, Suzhou and Beijing.

* Huadian Power International (1071.HK) rose 5.4 percent to HK$2.55. The power company said it produced 50.07 million megawatt-hours of electricity in the first half of 2009, up 5.15 percent from a year earlier, as more power plants commenced operation. [ID:nHKG50441]

* Orient Overseas (International) (0316.HK) gained 2.1 percent to HK$31.45, despite the shipping company forecasting continued weak container shipping volumes and rates for the second half of the year. The company said total revenue for the second quarter fell 42.6 percent year on year to US$869.6 million, with total container shipping volumes down 18.7 percent. [ID:nHKG51725]

SHANGHAI