HK shares end up 1.1 pct as Ping An soars

* Ping An soars after Fortis asset mangement deal pulled

* China properties rally on supportive govt measures

* Hang Seng Bank plunges on WaMu exposure

(Updates to close)

By Parvathy Ullatil

HONG KONG, Oct 2 (Reuters) - Hong Kong shares reversed course to end 1.1 percent higher on Thursday, helped by surge in Ping An Insurance (2318.HK) after newly-nationalised Fortis scrapped a $3 billion asset management deal with the Chinese insurer.

Chinese property stocks also rose sharply after state media reported regional governments were propping up the ailing sector with measures including subsidies for home buyers.

Investors largely shrugged off news of the U.S. senate's approval of the revised $700 billion bank bailout package ahead of a vote by the House of Representatives, which rejected the original rescue package on Monday. [ID:nHKG368564]

"The package itself is mainly facilitating a wealth transfer from shareholders of failed financial institutions to shareholders of the surviving giants. The survivors are going to be in good shape," said Erwin Sanft, head of China and Hong Kong research at BNP Paribas.

"In terms of what's happening in the real economy, it looks impossible at this point to avoid a global recession next year...we see the Hang Seng breaking below 16,000 in the next six months."

The benchmark Hang Seng Index .HSI finished up 194.90 points at 18,211.11 after dropping more than 2 percent earlier in the session. It is down almost 35 percent so far this year.

Mainboard turnover fell to HK$69.6 billion ($8.9 billion) from HK$71.8 billion on Tuesday.

The Hong Kong market was closed on Wednesday for the Chinese national day celebrations and mainland market remained closed on Thursday. But investors were hopeful of some central government response to help the battered property market and bought shares of developers.

"The Chinese central bank is expected to come forth and announce some measures to support the property market after the sharp slide in prices," said Castor Pang, strategist with Sun Hung Kai Financial.

"Regional governments have already announced some measures and it looks like the central government will also announce something to shore up the confidence in the market and keep growth rates intact." [ID:nHKG332764]

Shares in China Overseas Land Investment (0688.HK) vaulted 8.7 percent. China Resources Land (0291.HK) gained 9.3 percent. Guangzhou R&F Properties (2777.HK) shot up 13.4 percent.