HK shares rally 5.3 pct led by large caps; Esprit drops

* HK shares rebound from three-day, 13.5 pct sell-off

* Chinese properties rally on hopes of support measures

* Fashion retailer Esprit drops on weak forecast

* Dah Sing plunges on Lehman mini-bond sale investigation

(Updates to close)

By Parvathy Ullatil

HONG KONG, Oct 20 (Reuters) - Hong Kong shares jumped 5.3 percent on Monday, as blue chips bounced back from Friday's three-year closing low while Chinese property stocks cheered government steps to support the sector.

"Sentiment has improved as interbank rates have started to ease significantly," said Alex Wong, director with Ample Finance Group.

"This shows that the measures taken by central banks across the world are starting to reflect in the real world."

Chinese property stocks gained after state media reported that Beijing had endorsed local measures to stabilise the real estate market and would work out a nationwide policy based on their results, state media reported on Monday. [ID:nPEK293250]

China Overseas Land Investment (0688.HK) rallied 12.3 percent, while China Resources Land (1109.HK) soared 13 percent.

But Esprit Holdings (0330.HK), the world's No.5 fashion retailer bucked the trend to drop 4 after a CLSA report last week said the company may scrap its share buyback plan to focus on paying dividends.

The stock has dropped more than 19 percent since Oct. 14 and fell to a four-year low of HK$40.15 on Monday.

The report also quoted Esprit chief executive Heinz Krogner as saying that growth at the company's wholesale division would be close to zero in the next fiscal year.

Another fashion retailer, Giordano (0709.HK), dropped 3.5 percent despite a Merrill Lynch upgrade on the stock after half a dozen local retailers and apparel manufacturers appointed liquidators due to tight credit amid the global financial turmoil.

The benchmark Hang Seng Index .HSI closed 768.80 points higher at 15,323.01.