* Fundraising fears hit China bank shares
* HSBC falls on worries about its Dubai World exposure (Updates to close)
HONG KONG/SHANGHAI, Dec 9 (Reuters) - Shares in China and Hong Kong fell on Wednesday on concerns over more share issues and possible fundraising by banks, while sluggish overseas markets also weighed on sentiment.
The Shanghai Composite Indexended down 1.73 percent at 3,239.568 points, its lowest close in more than one week.
The index has pulled back over the past two days after rallying to the top of a range between 3,100 and 3,350 points that has confined the index over the past month.
Comments by authorities worried over the possibility of asset price bubbles have also curbed market enthusiasm.
Banks fell for a second day, with Industrial and Commercial Bank of China (ICBC)sinking 1.51 percent to 5.22 yuan. In Hong Kong, ICBC fell 1.53 percent and smaller rival China Construction Bank slid 1.87 percent.
Industrial Bank, a mid-sized Chinese lender, sagged 3.2 percent to 38.99 yuan after saying that its shareholders had approved its plan for an 18 billion yuan rights share issue. [ID:nTOE5B70AH]
"The index was pressured by increasing share supplies while possible fundraising in the bank sector left sentiment cautious and unstable," said Chen Shaodan, senior analyst at Stockfly Securities in Beijing.
"Turnover is small, suggesting the market is weak, and the index is expected to test its 30-day moving average now at 3,200 points in coming days," she added.
Losing Shanghai A shares outnumbered gainers by 747 to 156, while turnover dropped to a five-week low of 136 billion yuan ($19.92 billion) from Tuesday's 162 billion yuan.
China Shipbuilding Industrysaid on Wednesday it priced its A-share initial public offering at 7.38 yuan a share, as expected at the top of an indicated range, raising 14.7 billion yuan. [ID:nSHA236671]
Metal and coal shares were soft as the commodity markets were sluggish, with Jiangxi Copperdown 2.82 percent at 41.42 yuan while China Shenhua Energy lost 2.08 percent to 34.91 yuan.
Jiangxi Copperfell 3.75 percent in Hong Kong.
The auto sector was firmer on upbeat sales. FAW Carrose 8.80 percent to 26.34 yuan while FAW Xiali Automobile jumped its 10 percent daily limit to 10.12 yuan. [ID:nSHA128037] [ID:nTOE5B803U]
HONG KONG LACKS CATALYST
The benchmark Hang Seng Indexended down 1.44 percent, or 318.76 points, at 21,741.76, extending its losses for a fourth straight day. Turnover was up at HK$74.5 billion ($9.6 billion) from Tuesday's HK$68.5 billion.
The China Enterprises Indexof top locally listed mainland Chinese stocks was down 1.92 percent at 12,899.36.
"There are a lack of catalysts at this point to drive the market," said Belle Liang, research head at Core Pacific- Yamichi. "Hong Kong is mainly driven by overseas stock market performance, especially the drop in the U.S. overnight."
After rising by as much as 4 percent to HK$3.59, debutant Kaisa Grouplost steam and ended down 0.29 percent versus its IPO price of HK$3.45.
Index heavyweight HSBC, the most actively traded share, extended its fall on renewed worries over the lender's exposure to troubled Dubai World, which asked creditors to delay payment on its $26 billion of debt.
HSBC was down 2.6 percent, its fourth day of decline.
Standard Chartered Bank, which also has an exposure in Dubai World, fell 4.16 percent. [ID:nGEE5B723X]
Wing On Travelslumped 19.05 percent. The firm said it planned to raise up to HK$549 million ($70.84 million) by issuing up to 3.66 billion rights shares at HK$0.15 each, and would issue HK$300 million in convertible bonds.
Hong Kong Health Check and Laboratoryrose for a second day, gaining 14.06 percent. The stock surged 39.13 percent on Tuesday, after it said it would set up a joint venture with a state-owned enterprise in the mainland to engage in the solar photovoltaic business in Haenan province.
New Times Energyrose 6.06 percent. The firm said it would buy a 90 percent stake in three gold mines with licences in Qinglong Manchu Autonomous County, Hebei province.
Guangzhou Investmentadvanced 1.95 percent. The developer said it had secured a HK$3.2 billion syndicated loan facility from a group of banks in Hong Kong.
Contract cellphone maker Foxconn Internationalfell for a second day, shedding 3.22 percent, as investors continued to pocket recent gains. Foxconn surged 16.9 percent on Monday after Morgan Stanley raised its target price on the stock.
Chinese developer R&F Propertiesfell 4.08 percent, while the blue-chip property sub-index was down 1.18 percent. The official Xinhua news agency reported that Beijing will crack down on speculation in the property market. [ID:nBJB003600]
(Editing by Jacqueline Wong)
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