* Shanghai shares fall most in 9 months, to 2-month low
* HK shares post biggest drop in 4-½ months
* Oil, coal, metals stocks hit by lower commodity prices (Updates to close)
By Parvathy Ullatil & Claire Zhang
HONG KONG/SHANGHAI, Aug 17 (Reuters) - Chinese stocks tumbled 5.8 percent to their lowest close in two months on Monday, posting their biggest daily percentage drop in nine months on worries about added share supply and commodity price declines.
Hong Kong shares posted their steepest drop in 4-½ months of 3.6 percent on Monday, tracking a sharp drop on the Shanghai bourse and after U.S. consumer confidence data darkened the global economic outlook.
"Definitely not a capitulation ... just that things were looking a bit overdone," said Andrew Sullivan, sales trader with MainFirst Securities. "The markets have had a good run but a lot of people are still undecided on which way they will continue to move, so when there's some bad news like the U.S. data, it's not unusual to see some people take their money off the table."
Investors are expected file back into the market if the main index in Hong Kong slips below 20,000 points, a key psychological level on the benchmark.
But the mood among mainland Chinese investors was gloomy, with the main index down 17.5 percent from its 14-month high of 3,478 points hit two weeks ago.
"The downtrend is clear. The index has not found a safe floor yet. Everbright's listing, regulators' warnings to banks on risk and a gloomy commodity market triggered panic selling," said Tang Yonggang, chief strategist at Hong Yuan Securities.
In recent weeks, concerns mounted that this year's rally of more than 90 percent had got far ahead of China's economic recovery, especially after July economic data released last week suggested that the recovery was taking a breather.
Major brokerage Everbright Securities will list its shares in Shanghai on Tuesday after raising 10.96 billion yuan ($1.60 billion) in its initial public offering. [ID:nSHA300163]
COMMODITY STOCKS BEATEN DOWN
The Shanghai Composite Index closed down 176.342 points at 2,870.630, extending last week's 6.6 percent drop.
Losing Shanghai A shares outnumbered gainers by 914 to 23, with more than 100 Shanghai A shares sinking by their 10 percent daily limit. Turnover for Shanghai A shares dropped to 136.9 billion yuan ($20.0 billion) from Friday's 145.8 billion yuan.
"Market volatility continued today and will continue into the near term because of uncertainties surrounding China's economic recovery and government policy towards the stock market," said Zhou Lin, stock analyst at Huatai Securities in Nanjing.
In Hong Kong, Chinese bank stocks were the top traded counters as investors, fearful of likely monetary tightening in China, booked profit.
China Construction Bank was down 2.8 percent, while Bank of China slid 3.9 percent.
The benchmark Hang Seng Index finished 755.68 points lower at 20,137.65, its lowest closing level since end-July.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was down 4.2 percent at 11,395.01.
Ping An Insurance shrank 5.9 percent after posting a 38.8 percent drop in its first-half profit.
Oil and coal shares were weak as oil prices fell below $67 per barrel, extending their biggest drop in two weeks on Friday. PetroChina, the most-heavily weighted stock in the index, lost 6.1 percent to 13.09 yuan, while China Shenhua Energy skidded 6.4 percent to HK$30.55.
Metals shares were hit by a slide in Shanghai metals futures prices, with Jiangxi Copper sagging by its 10 percent daily limit to 37.37 yuan. Yunnan Copper, China's third-largest copper producer, also dropped by its 10 percent limit to 29.84 yuan after posting a first-half loss.
China on Monday posted a 10th straight monthly fall in foreign direct investment for July, although a commerce ministry spokesman expressed optimism about China's export outlook.
China has also set up a committee to approve IPOs for its planned Nasdaq-style second board that will begin deliberations in September, marking another major step towards the formal launch of the market which will add further to equity supplies.
China's top banking regulator urged the heads of leading Chinese banks late on Friday to bolster risk management and strictly monitor capital flows as conditions remained serious.
"The Shanghai Composite Index has little potential to recover its 2009 high of nearly 3,500 any time soon, as investor sentiment was severely hit by the market's recent fall," said Huatai's Zhou. (Editing by Edmund Klamann and Chris Lewis)