HK stocks drop 2.6 pct to 7-week low

HONG KONG, July 13 (Reuters) - Hong Kong shares fell the most in three weeks, dropping 2.6 percent to a seven-week low on Monday as worries about likely austerity measures from Beijing, following a strong surge in bank lending in the first half, persisted.

China Eastern Airlines (0670.HK) trimmed early sharp gains to end 2.9 percent higher after the money-losing air carrier said it would merge with Shanghai Airlines (600591.SS) in a share swap, and issue A shares and H shares worth about 7 billion yuan ($1.03 billion) to replenish its working capital.[ID:nSHA356254]

The benchmark Hang Seng Index .HSI finished down 453.79 points at 17,254.63.

The China Enterprises Index .HSCE, which represents top locally listed mainland Chinese stocks, fell 2.8 percent to 10,279.25. (Reporting by Parvathy Ullatil; Editing by Chris Lewis)