HK shares gain for 4th day; China stocks at 13-mnth high

* HK shares gain for 4th day; up 6.2 pct on week

* China shares inch up to 13 month closing high

* Both markets seen consolidating after hefty gains (Updates to close)

By Parvathy Ullatil and Claire Zhang

HONG KONG, July 17 (Reuters) - Hong Kong shares jumped 2.4 percent in a fourth straight winning session on Friday as investors, cheered by strong earnings reports from U.S. companies and reassuring data from China, flocked to banking and property stocks.

Shanghai stocks lagged, inching up to a 13-month closing high, bolstered by this week's solid economic data and a surge in aluminium shares on hopes producers will soon reach an agreement that will slash their energy costs.

BEST WEEKLY GAIN IN HK SINCE END-MAY

The benchmark Hang Seng Index closed up 443.79 points at 18,805.66, gaining 6.2 percent in its best weekly advance in seven weeks.

Turnover dropped to HK$66.2 billion ($8.5 billion) from HK$70.9 billion on Thursday. Average daily turnover, which has been on the decline since a year-high of around HK$80 billion in May, has been languishing at an average HK$57 billion so far in July.

"Falling turnover is calling for more caution on the market's direction. Even if the index can make its way up to 20,000 points in the near term, it can change direction momentarily," said Alex Tang, research director with Core Pacific-Yamaichi International.

The China Enterprises Index, which represents top locally listed mainland Chinese stocks, finished up 2.2 percent or 243.96 at 11,146.43.

Heavyweight HSBC (0005.HK) led the charge with a 2.2 percent gain after its U.S. peer JPMorgan trumped expectations with its quarterly earnings on Thursday.

"A number of companies have already issued profit warnings here, so earnings are likely to be mixed. Further upside seems relatively difficult once corporate results start pouring in. Investors would much rather put their money into the IPO market," said Ben Kwong, chief operating officer with KGI Asia.

Orient Overseas (International) (0316.HK) clawed back 49.6 percent after a programme trade in the final minute of trade on Thursday sent the stock plunging 32 percent. The stock rose to HK$34.40 after closing at a 2-½ month low of HK$23 in the previous session.

China WindPower Group (0182.HK) dropped 6.2 percent after saying it would sell 700 million new shares to major shareholder Gain Alpha in a top-up placement to raise HK$579 million ($74.71 million) to fund acquisitions and increase installed capacity.

Hisense Kelon Electrical Holdings (0921.HK) gained 23.6 percent to HK$1.73 after agreeing buy home electronics manufacturing and sales assets from parent Qingdao Hisense for 1.24 billion yuan ($181.5 million). Its Shenzhen-listed shares (000921.SZ) gained 0.3 percent. The deal will be settled by an issue of up to 362.05 million A shares at 3.42 yuan each.

SHANGHAI INCHES UP, LAGS HK

The Shanghai Composite Index .SSEC ended up 0.2 percent or 5.999 points at 3,189.741, posting a 2.4 percent weekly gain.

Gaining Shanghai A shares outnumbered losers by 559 to 344, while turnover for Shanghai A shares dropped to 186.1 billion yuan ($27.2 billion) from Thursday's two-year high of 217.9 billion yuan.

Chalco (601600.SS), China's top aluminium company, Shandong Nanshan Aluminium (600219.SS) and Yunnan Aluminium (000807.SZ) were among producers whose shares all raced up by the 10 percent daily limit.

"Ample liquidity is creating a small stock bubble, and new shares in IPOs are expected to enjoy strong debuts," said Tang Yonggang, chief strategist at Hongyuan Securities in Beijing. Tang said that, while the index was taking a breather near the 3,200 line, a further rise was expected next week.

The Shanghai Composite has been fighting technical resistance around current levels, where a gap on the charts was formed during the plunge in mid-June last year. A rise above 3,312 points would fill that gap, but just above near 3,375 is the 38.2 percent retracement of its 2007/2008 slide.

More signs of economic recovery were keeping investors upbeat after Thursday's figures showed growth accelerating in the second quarter.

Chinese power generation, closely watched for economic trends, increased 5.2 percent in June from a year earlier. It was the first increase in a non-holiday month since October as hotter weather and a reviving economy drove up demand. [ID:nPEK71099]

Coal shares were lifted by the positive power data, with China Shenhua Energy (601088.SS) climbing 4.06 percent to 34.33 yuan.

China's Sichuan Expressway (0107.HK) priced its Shanghai initial public offering (IPO) at the top end of the indicative range, raising $264 million. The offer was 414 times subscribed, highlighting the strong demand for new shares among household investors. [ID:nSHA287663]

Analysts said another major IPO may be announced over the weekend. Next week China State Construction Engineering Corp will launch the world's largest IPO so far this year, with book-building starting on Tuesday. Some analysts have estimated that subscriptions could hit 1 trillion yuan ($146.4 billion).

"The uptrend is unchanged for the index, which may consolidate around the 3,100 to 3,200 level next week," said Guo Yanlin, an analyst at Shanghai Securities.

China Pacific Insurance (601601.SS), the country's third-largest life insurer, advanced 3.34 percent to 28.81 yuan after confirming it would restart a planned share sale in Hong Kong. The listing was expected to be priced at a discount to the Shanghai price. [ID:nSP383297] (Editing by Eric Burroughs and Chris Lewis)