* HK shares fall off nine-month high above 19,000 pts
* China shares fall most in month on IPO restart worries
* Banks, Li & Fung played catch up in HK
(Updates to close)
By Parvathy Ullatil & Claire Zhang
HONG KONG/SHANGHAI, June 12 (Reuters) - Chinese stocks sank 1.91 percent on Friday, their biggest daily drop in one month, as expectations mounted of an imminent resumption of initial public offerings, which could include a large offering.
The slump in China stocks pushed Hong Kong's Hang Seng Index off the nine-month high it hit earlier in the day but the index managed to eke out a 0.5 percent gain, rising for a third day in a row and a fourth straight week.
Banks including HSBC and Chinese lenders CCB and ICBC led gains in Hong Kong, as the latest deluge of data from China and the United States strengthened the case for an early turnaround in the global economy.
DIDN'T STICK ABOVE 19,000 PTS
The benchmark Hang Seng Index finished up 0.5 percent at 18,889.68 after briefly touching 19,161.97, its highest level since September 25, 2008.
But the index, which has been pushing up against the psychologically significant 19,000-point level for two weeks, was unable to hold above that mark for long.
"Pushing the index above 19,000 points was crucial to creating the impression that this is a bull market," said DBS Vickers director Peter Lai.
"But at this level, selling pressure is very high. Funds that bought into the market at 12,000-13,000 points have already begun to take profit," he said.
Turnover edged up to HK$79 billion ($10.1 billion), from HK$78.4 billion on Thursday.
The China Enterprises Index of top mainland companies rose 0.1 percent to 11,088.77.
Select industrial stocks and metal counters were buoyed by data that showed China's May factory output rose more than forecast and retail sales growth accelerated.
Chinese bank stocks jumped after data showed new yuan lending rose in May, in line with expectations, and on reports that the country's No.3 lender, CCB, was looking to buy stakes in a domestic insurer and China Cinda Asset Management.
Top lender Industrial and Commercial Bank of China (ICBC) was up 2.4 percent at HK$5.22, while China Construction Bank (CCB) advanced 2.9 percent to HK$5.62. Both stocks moved in large volumes, making up 13 percent of total turnover on the exchange in the morning session.
The loan data also supported strong gains in Chinese property counters, with China Overseas Land climbing 4.5 percent and Guangzhou R&F Properties advancing 3 percent.
Global lender HSBC climbed 3.5 percent to HK$69.85,lifted by encouraging retail sales and jobs data from the U.S. The stock has lagged behind its peers and the broader index as it went into a tailspin ahead of its cash call in March. HSBC has edged up 2 percent since the beginning of the year, compared with the 32 percent rally on the Hang Seng Index.
HSBC shares were raised to an "outperform" rating from "neutral" by Credit Suisse on Thursday with a target price of HK$84, as it is seen to be less vulnerable to the margin pressure on European banks in the medium term.
IPO NEWS OVER THE WEEKEND?
The Shanghai Composite Index ended down 53.558 points or 1.91 percent at 2,743.762 points. The index was down 0.4 percent for the week.
Losing Shanghai A shares outnumbered gainers by 779 to 146, while turnover in Shanghai A shares dropped to 123.3 billion yuan ($18.1 billion), the lowest so far this month, from Thursday's 132.2 billion yuan.
Expectations rose that IPOs were about to restart after a senior securities regulator said an IPO resumption would precede the launch of a new Nasdaq-style second board for start-up companies.
Domestic media and market news websites cited rumours that China State Construction Engineering, China's biggest homebuilder, could be cleared this weekend to proceed with an IPO, fuelling worries about an increase in the supply of equity on the market.
China State Construction could not immediately be reached for comment.
"Investors are wary in case negative (IPO) news comes out over the weekend and IPOs could weigh on the market in the short term, but they won't keep the index from setting a new high for the year," said CITIC-Kington Securities analyst Qian Xiangjing.
Steel shares were weak for a second day, with Baosteel, China's top steelmaker, sinking 3.2 percent to 6.60 yuan on worries over possible output cuts and rising costs.
Beverage manufacturer Hainan Yedao sagged 8.5 percent to 10.82 yuan after estimating its losses in the first half of 2009 could hit 20 million yuan ($2.93 million).
Among gainers, Minmetals Development jumped 3.8 percent to 19.20 yuan after its parent company sealed a $1.4 billion deal for assets of Australian miner OZ Minerals Ltd.
Several health product stocks gained after the World Health Organisation declared an influenza pandemic on Thursday. Guilin Layn Natural Ingredients, a health food products maker, and Da An Gene, a developer of gene diagnostic technologies and related products, both rose by the 10 percent daily limit.
(Editing by Edmund Klamann and Chris Lewis)