* China Vanke share sale weighs down China shares
* Esprit, CNOOC drop in HK after weak earnings
* Sino Gold surges on $1.8 billion Eldorado bid (Updates to midday)
By Parvathy Ullatil & Claire Zhang
HONG KONG/SHANGHAI, Aug 27 (Reuters) - Hong Kong shares retreated in waning turnover and a weak showing from blue chips including CNOOC and Esprit after their earnings reports made investors wary ahead of another flurry of results on Thursday.
China's benchmark stock index fell 0.4 percent after a big share offer announced by the country's second-biggest listed property developer, China Vanke kept the focus on a hefty supply of new shares in the near future.
But China stocks outperformed most major markets in the region, where Japan's Nikkei average had shed 1.7 percent and Seoul's KOSPI dropped 1.1 percent, with technically driven buying helping to partially offset the impact of Vanke's share sale.
Among outperformers, Sino Gold Mining Ltd <1862.HK> surged 12 percent to HK$42.55 in Hong Kong after Canada's Eldorado Gold Corp launched a $1.8 billion bid for the company. [ID:nSYD445243].
Its Australia-listed shares jumped 12.2 percent to A$6.70, with Eldorado's all-share bid equating to around A$7.24 per share, based on Tuesday close.
EARNINGS DISAPPOINTMENT WEIGHS
By 0410 GMT, the benchmark Hang Seng Index was 1.2 percent lower at 20,213.07, with shares worth HK$29.3 billion changing hands
"There is really no positive news to drive gains in markets in the region. Futures traders are using this as an excuse to sell down the market ahead of the August futures expiry tomorrow," said Conita Hung, head of equity markets at Delta Asia Financial Group.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was down 1.4 percent at 11,495.20.
Esprit tanked 14.1 percent to HK$51.45 after the world's No.6 fashion retailer by market value posted a 40 percent fall in second-half profit as global economic woes took a bite out of its core European market.
Morgan Stanley cut its rating on the stock to "equal weight" from "overweight" as its expects to see further weakening in Esprit's business, particularly on the wholesale side, over the next six months.
Property conglomerate Wharf Holdings was the best performer on the main index, rising 6.8 percent after its better-than-expected 44 percent increase in core earnings were met with brokerage upgrades.
Citigroup and Deutsche Bank raised their rating on the stock to "buy", citing solid growth in its China business and its relatively attractive valuation.
China's top offshore oil producer CNOOC fell 3.2 percent after it reported a 55 percent drop in first-half earnings, its lowest half-year profit since early 2005.
Oil fell towards $71 per barrel on Thursday, extending losses by more than $3 after touching a 10-month high this week, as rising crude and diesel stocks eclipsed healthy economic data.
SHARE SUPPLY STILL IN SPOTLIGHT
The Shanghai Composite Index was down 12.688 points at 2,954.907 at midday. It opened down 0.67 percent but rose as much as 0.7 percent during the morning session. It had closed up 1.8 percent on Wednesday on a technical rebound.
The market is struggling to stabilise following a two-week, 20-percent slide earlier in the month.
"The rebound is not over yet. The index may head above 3,000," said analyst Zhang Yanbing at Zheshang Securities in Shanghai.
Analysts have said the market now seems to be driven by technical factors, concerns over share supply and other domestic factors, rather than worries about China's economic recovery, which is seen on track.
Vanke dropped 0.2 percent to 10.79 yuan, after falling as much as 4.1 percent. It announced plans for a new public share offer to raise up to 11.2 billion yuan ($1.6 billion) in net proceeds, equivalent to a major initial public offering of stock.
"The Vanke plan has investors worried about more possible fund-raising and the pace of IPOs isn't letting up, so confidence is waning in the short term," said Wu Nan, analyst at Xiangcai Securities in Shanghai.
China's stock regulator approved on Wednesday an application by Metallurgical Corp of China (MCC) to launch an initial public offer in Shanghai aiming to raise around 16.85 billion yuan, in part to fund overseas projects.
Four small-cap shares will also list in Shenzhen on Friday.
Property shares were mixed, with the Shenzhen real estate index edging down 0.7 percent to 1744.976 points.
China's cabinet said on Wednesday that it would take steps to curb overcapacity and redundant investment in industries ranging from steel to cement, the official Xinhua news agency reported.
Oil refiners underperformed the market as domestic oil prices remained unchanged despite surging global prices, disappointing market expectations that they would be raised.
Sinopec Corp slid 3.2 percent to 13.01 yuan, while PetroChina, the most heavily weighted stock in the index, sagged 2.2 percent to 14.08 yuan ahead of its first half earnings later on Thursday. (Editing by Edmund Klamann and Chris Lewis)