HK shares end 3 day losing streak; China stocks advance

* China shares gain 5.5 pct in best week in 2 months

* HK shares give up 2 percent in holiday-shortened week

* Chinese shampoo maker BaWang soars on debut (Updates to close)

By Parvathy Ullatil and Claire Zhang

HONG KONG/SHANGHAI, July 3 (Reuters) - Chinese stocks rose 0.9 percent on Friday and scored a 5.5 percent weekly gain, the best in eight weeks, with coal and property shares strong as brisk lending growth and rising power output boosted optimism over the economy.

Hong Kong shares, which spent most of the session in the red after a bleak U.S. jobs report, clawed back 0.1 percent by the end of trade on Friday, snapping a three-day losing spell, as Chinese insurers climbed, tracking strong gains on the mainland markets.

Defying the lukewarm broader Hong Kong market, shampoo maker BaWang International (Group) Holdings (1338.HK) soared more than 30 percent on its debut, after its $214 million IPO ranked among the most popular issues this year with its retail portion subscribed more than 400 times. [ID:nHKG280265]

"That's the way the Hong Kong market functions; when something is hot everyone wants a piece of it," said Jackson Wong, investment manager with Tanrich Securities.

Shares in company, which makes an "anti-falling" shampoo, rose 27.3 percent to HK$3.03 by the end of the session.

Another market debutante, China Qinfa (0866.HK) also fared well with shares in the coal trading company tacking on 6.3 percent.

TURNOVER DROPS IN HONG KONG

The benchmark Hang Seng Index .HSI finished 25.35 points higher at 18,203.40, but lost 2.1 percent on the holiday-shortened week.

Turnover slowed to HK$54.3 billion from Thursday's HK$68.4 billion ahead of the Independence Day holiday in the U.S. on Friday.

Asia's biggest oil refiner Sinopec Corp (0386.HK) advanced 1.5 percent to HK$5.96 as crude oil fell towards $66 per barrel after the latest U.S. payroll data signalled the world was still grappling with a deep recession.

"The market may be cautious going into next week when Alcoa kicks off the corporate reporting season," said Andrew Sullivan, sales trader with MainFirst Securities. "But there is still a lot of money waiting on the sidelines and the index should continue to move between 17,500 and 19,000 points."

The China Enterprises Index .HSCE, which represents top locally listed mainland Chinese stocks, rose 0.1 percent to 10,983.77.

Coal stocks rose on Friday after a news report that China's power output in June increased 3.6 percent from a year earlier, its first increase since October.

The world's most valuable coal miner China Shenhua (1088.HK) rose 2.3 percent while in Shanghai Shenhua Energy (601088.SS) gained 5.2 percent to 33.45 yuan.

The official China Securities Journal cited unnamed company executives as saying it planned to increase its annual production capacity to 400 million tonnes by 2014, up from 190 million tonnes this year.

Datang Power (0991.HK) rose 1.1 percent to HK$4.68 while its Shanghai-listed shares (601991.SS) jumped 4 percent to 8.60 yuan.

Casino operator Melco International Development (0200.HK) dropped 5.8 percent to HK$3.93 after Credit Suisse cut its rating on the stock, and on shares of its 34.06 percent owned associate Melco Crown Entertainment Ltd (MPEL.O) to "underperform" from "neutral" following the below-expectations debut of its new casino in Macau.

Melco Crown's City of Dreams casino in the Chinese gambling enclave of Macau notched up a rolling chip turnover of $1.94 billion in its opening month in June, but the casino only won 0.8 percent of those bets compared with an expected win rate of 2.85 percent.

Hunan Nonferrous Metals (2626.HK) shed 3.1 percent after it warned of losses in the six months ended in June as the average selling price of lead and zinc products remained low and demand for tungsten and antimony products was unsatisfactory. The company posted a profit of 190.5 million yuan in the same period a year earlier.

SHANGHAI SHARES GO FROM STRENGTH TO STRENGTH

The Shanghai Composite Index .SSEC ended up 28.113 points at 3,088.367, setting a 13-month closing high for a third consecutive session.

The surging Chinese stock market supported gains in Hong Kong-listed mainland insurers with Ping An Insurance (2318.HK) jumping 4.5 percent to HK$56.65, while the world's largest insurer China Life (2628.HK) rose 1.8 percent on expectations of enhanced investment income.

Gaining Shanghai A shares outnumbered losers by 575 to 338, while turnover in Shanghai A shares dipped to 177.0 billion yuan ($25.9 billion) from Thursday's heavy 180.6 billion yuan.

"There's a smooth rotation among rising sectors, money inflows are exceeding outflows in the market, and sentiment is holding up despite Wall Street's loss, with the economic situation in China much better than overseas. The index could keep rising," said CITIC-Kington Securities analyst Qian Xiangjing.

The official Shanghai Securities News on Friday reported that new lending by Chinese banks was likely to exceed 10 trillion yuan ($1.46 trillion) this year, even as bank regulators warned about risks from improper loans. [ID:nSHA277333]

Property shares outperformed, with China Vanke (000002.SZ) gaining 6.97 percent to 14.28 yuan. Most institutions have rated the property sector a "buy" due to rising sales and prices, analysts said. (Editing by Edmund Klamann and Chris Lewis)