HK shares up 3.4 pct on US gains;China banks rally

* HSI, HSCE stocks up in broad Wall Street-triggered rally

* Sinopec soars on forecast-beating profit, fuel hike talk

* Yanzhou Coal gains on strong first-half profit growth

(Updates to mid-day)

HONG KONG, Aug 25 (Reuters) - Hong Kong shares rose 3.4 percent on Monday, with the entire blue chip index joining a Wall Street-fuelled rally on the local bourse, bouncing back from a sharp sell-off on Thursday.

A clutch of stocks including Sinopec Corp (0386.HK), Yanzhou Coal (1171.HK), China Construction Bank (0939.HK) and ICBC (1398.HK) surged after posting forecast-beating or matching first-half earnings.

Local shares slipped 2.6 percent on Thursday on fading hopes for the imminent launch of a stimulus plan from China as well as caution ahead of the typhoon-triggered holiday on Friday.

China's second largest lender, China Construction Bank, shot up 3.7 percent after announcing a 71 percent growth in profit, in line with analyst expectations.

HSBC upgraded the stock to neutral from underweight on Monday, following the recent decline in its share price. Shares in CCB have slipped more than 13 percent this month as worries over inflation and slowing growth in China weighed down the banking sector.

Shares in the nation's largest bank ICBC rallied 3.5 percent after the lender posted a 41 percent increase in net profit in the second quarter.

The benchmark Hang Seng Index .HSI ended the morning session 690.30 points higher at 21,082.36 after opening up 1.7 percent.

"Hong Kong shares were heavily oversold on Thursday and are now catching up with gains on Wall Street on Thursday and Friday," said Castor Pang, strategist with Sun Hung Kai Financial.

Mainboard turnover had risen to HK$30.8 billion ($3.9 billion) from HK$29.5 billion at mid-day on Thursday.

Index heavyweights anchored gains on the HSI with HSBC Holdings (0005.HK) rising 3.1 percent and China Mobile (0941.HK) climbing 2.8 percent.

The China Enterprises Index .HSCE of top locally listed mainland Chinese firms rallied 4 percent.

Shares in Asia's largest refiner Sinopec Corp (0386.HK) rose 3.8 percent helped by retreating crude oil prices and growing speculation that Beijing may hike prices of petroleum products for the second time this year.

Chinese refiners have suffered losses this year, squeezed between rising international crude oil prices and regulated prices of refined products in the mainland.

Petrochina (0857.HK), which also stands to gain from higher domestic fuel prices, jumped 3.9 percent.

Shares in Yanzhou Coal Mining (1171.HK) soared 5.3 percent after the coal miner said on Sunday its net income jumped 160 percent in the first half of 2008 on high coal prices.

China Shenhua Energy (1088.HK), the world's most valuable coal miner, surged 6 percent while smaller rival China Coal Energy (1898.HK) gained 6.2 percent.

Shares in offshore oil producer CNOOC (0883.HK) advanced 4.3 percent despite a continued correction in global crude oil prices as investors concentrated on the company's first-half earnings due on Wednesday.

CNOOC, an upstream pure play, is expected to post strong net profit growth in the first six months, helped by the record-setting surge in crude oil prices and increased demand.

Billionaire Li Ka-shing's flagship conglomerate Hutchison Whampoa (0013.HK) rallied 3.1 percent following a series of target price upgrades and increased earnings estimates from major brokerages.

On Thursday, the company beat analyst estimates, nearly tripling its underlying profit in the first half, thanks to a strong showing at its Canadian unit Husky Energy (HSE.TO) and improved third-generation (3G) network business.

The stock ended 1.3 percent lower on Thursday following a sell-off in the broad market ahead of Friday's typhoon holiday.

Li's property major Cheung Kong Holdings (0001.HK) surged 3.4 percent after posting a smaller-than-expected decline in first half net profit on Thursday.

Hong Kong's largest air carrier, Cathay Pacific Airways (0293.HK) climbed 5.4 percent as crude oil prices continued to slide on Monday after posting their biggest drop since December 2004 on Friday.

China Unicom (0762.HK), the nation's second largest wireless service carrier gained 4.9 percent, while China Netcom (0906.HK), its second-largest fixed-line service provider, put on 4.5 percent. Both companies are due to announce their first-half earnings later today.

($1=6.833 Yuan)

($1=7.805 Hong Kong Dollar)

(Reporting by Parvathy Ullatil; Editing by Ken Wills and Jonathan Hopfner)