HK, Shanghai shares fall; commodites, exporters drop

* Hong Kong lower as oil, metals stocks ease

* China advances on upbeat manufacturing data

* Yuzhou Property retreats on Hong Kong debut
(Updates to midday)

By Jun Ebias and Claire Zhang

HONG KONG/SHANGHAI, Nov 2 (Reuters) - Hong Kong shares fell
on Monday morning, as oil and metals stocks dropped on lower
commodities prices, while Shanghai shares moved higher after data
pointed to sustained industrial expansion in China.

China's key stock index rose 0.49 percent, bouncing from a
drop of more than 2 percent in early trade, as auto and
health-related shares gained.

The benchmark Hang Seng Index .HSI was down 1.72 percent,
or 374.70 points, at 21,378.17 at midday. Turnover was HK$36.66
billion ($4.7 billion), versus midday Friday's HK$42.60 billion.

"There is no significant indication that the global economy
will recover strongly, so investors in Hong Kong are taking
profit," said Steven Lam, vice-president at Karl-Thomson
Securities.

Chinese offshore oil and gas specialist CNOOC Ltd (0883.HK)
shed 3.33 percent, while Jiangxi Copper (0358.HK) slipped 1.99
percent. [ID:nTOPCE]

Angang Steel (0347.HK) was down 2.04 percent. PetroChina
(0857.HK) fell 1.87 percent.

Li & Fung (0494.HK) declined 3.65 percent and Esprit Holdings
(0330.HK) lost 2.66 percent, as U.S. consumers' gloomy economic
outlook weighed on exporters.

Chinese property developer Yuzhou Property (1628.HK) was down
4.8 percent on its trading debut.

The China Enterprise Index of top locally listed mainland
Chinese stocks was down 1.46 percent at 12,582.58.

Bucking the trend, Tencent Holdings (0700.HK), which operates
popular online games in China, rose 2.26 percent on a rosy
earnings outlook. Credit Suisse raised its target price to
HK$153.60 from HK$131.60 and kept its "outperform" rating.

"Tencent is gaining share in both the e-commerce and payment
markets," Credit Suisse said in a note on Monday, adding that its
gaming and advertising revenue would continue to grow.

Nine Dragons (2689.HK) was up 1.06 percent. The packaging and
paper maker's plan to use proceeds from the sale of new shares to
pay off debt would help lift profit, analysts said.

China Power International (2380.HK) fell 1.83 percent. The
company said Beijing had approved its plan to build a coal-fired
generation unit in Sichuan province.

Chinese ingot and wafer maker Comtec Solar (0712.HK), which
debuted in Hong Kong on Friday, extended its fall, down 8.08
percent at the midday break. The stock closed 5.7 percent lower
on Friday on concerns that demand for its products would remain
weak.

SHANGHAI HIGHER

The Shanghai Composite Index .SSEC ended the morning at
3,010.552 points after sliding as far as 2,923.525, below the
closely watched 125-day moving average now at 2,940 points.

The Nasdaq-style ChiNext market for start-up shares
<0#CHINEXT.SZ>, which surged on its trading debut on Friday,
ended mixed after 27 of its 28 shares fell by the 10 percent
daily limit at the open on profit-taking.

Hospital services provider Aier Eye Hospital Group
(300015.SZ), one of the most actively traded shares on Chinext,
fell 2.98 percent to 50.40 yuan.

The broader market initially took its cues from New York
stocks, which on Friday posted their biggest one-day fall since
July, but traders quickly shifted attention to the recovering
domestic economy.
HSBC's China Purchasing Managers' Index (PMI) for October,
released in the morning, rose to an 18-month high of 55.4 from
55.0 in September, underscoring the strength of the manufacturing
sector. [ID:nSEO80466]

The official PMI, released on Sunday, rose to an 18-month
high of 55.2 in October from 54.3. [ID:nPEK81136]

"The market opened lower with pressure from weakness
overseas, but drew support from the positive PMI and firmer
earnings," said Zhou Lin, senior analyst at Huatai Securities in
Nanjing.

Auto shares rose, cheered by upbeat results. Chongqing
Changan Auto (000625.SZ) gained 5.36 percent to 13.75 yuan after
reporting a 145 percent rise in net profit.
SAIC Motor Corp (600104.SS), China's largest carmaker,
advanced 3.36 percent to 24.00 yuan after reoporting that
third-quarter net profit jumped ninefold. [ID:nSHA324757]

The Chinese daily Oriental Morning Post reported that SAIC
may manufacture BMW's (BMWG.DE) 7 series sedan in China.
[ID:nSHA117535]

Gaining Shanghai A shares outnumbered losers by 624 to 241,
while turnover rose to 71 billion yuan ($10.40 billion) from
Friday morning's 61 billion yuan.

Health-related shares rose after China's Premier Wen Jiabao
warned about the spread of the H1N1 influenza. [ID:nPEK74552]

Shenzhen Neptunus Bioengineering (000078.SZ) advanced by its
10 percent daily limit to 20.35 yuan.

Companies that may benefit from a proposed Walt Disney Co
(DIS.N) theme park in Shanghai outperformed. Shanghai Lujiazui
Finance & Trade Zone Development (600663.SS) rose 5.40 percent to
29.48 yuan. Shanghai Jielong Group Industry (600836.SS) climbed
its 10 percent daily limit to 18.57 yuan.
(Editing by Chris Lewis)