HHK, China shares headed for big 2nd quarter gains

(Updates to midday)

HONG KONG/SHANGHAI, June 30 (Reuters) - Hong Kong shares are set to seal their biggest quarterly gain in more than 15 years with a 0.8 percent rally on Tuesday as investors made a last-ditch effort towards window dressing ahead of the mid-year deadline.

In Shanghai, the main index is heading for a gain of 25 percent for the quarter and 13 percent for the month, boosted by signs of economic recovery and ample liquidity in the financial markets.

"What we saw was the reversal of the panic selling in the fourth quarter of 2008, with central governments across the world doing the right thing. But from here on it is a lot harder to see where we are headed," said Winson Fong, managing director with SG Asset Management in Hong Kong.

Oil refiners outperformed, while carmakers and airlines fell after China increased gasoline and diesel prices for the third time since late March to their highest levels ever. [ID:nPEK4425]

PetroChina (601857.SS), the most heavily weighted stock on the Shanghai index, gained 0.55 percent to 14.52 yuan while its Hong Kong-listed shares (0857.HK) added 2.1 percent. Asia's top refiner Sinopec Corp (600028.SS) (0386.HK) advanced 1.04 percent to 10.70 yuan in Shanghai and 4.7 percent to HK$5.99 in Hong Kong.

Here are the index moves and top stock moves in early trade-

HONG KONG

* The benchmark Hang Seng Index was 0.8 percent higher at 18,667.30.

The 42-stock gauge rose 37.5 percent in the second quarter, its best performance since the Oct.-Dec. period in 1993, buoyed by signs of a likely early recovery in the Chinese economy.

* The China Enterprises Index, which represents top locally listed mainland Chinese stocks, had risen 1.5 percent to 11,149.09.

* BOC Hong Kong (2388.HK), the local unit of China's No.3 lender Bank of China (3988.HK) climbed 4.7 percent to HK$13.88 a day after China and Hong Kong signed a memorandum to launch yuan trade settlement in Hong Kong. [ID:nHKG363557]

* DBS estimated that BOC Hong Kong would add 4 percent to its net profit and 8 percent to its fee income in 2009 if the lender can corner 40 percent on the total yuan trade settlement business.

* Chinese sportswear retailer 361 Degrees International (1361.HK) rose 13.9 percent from its initial public offering price on its debut on the Hong Kong stock exchange.

The stock was at HK$4.11 by midday after opening at HK$4.13 and soaring to high of HK$4.28 soon after, compared with its initial public offering price of HK$3.61 per share.

* SMIC (0981.HK) (SMI.N) rose 8 percent after China's biggest contract chipmaker raised its revenue growth forecast for the second quarter to between 76 and 78 percent compared with the previous three months.