* Hong Kong shares trim loss after finding support
* China stocks lower, led by metals stocks
* Lilang falls on debut as IPO sentiment soured (Updates to midday)
By Donny Kwok and Lu Jianxin
HONG KONG/SHANGHAI, Sept 25 (Reuters) - Hong Kong stocks trimmed earlier losses, consolidating as the key index gained support after falling to a near three-week low on Friday. China stocks also fell weighed down by metal stocks.
The benchmark index fell to as low as 20,766.46, its lowest since Sept. 8, before trimming losses to 20,932.98 at midday, down 117.75 points or 0.56 percent from the previous close. It opened 1.1 percent lower this morning as banks and property remained soft.
"Risk-taking appetite is still there and market started to firm again after finding support at around 20,800 points," said Alex Wong, a director at Ample Finance Group.
"The underlying tone is cautiously bullish, although the recent poor debut of an IPO hit sentiment. A retreat below the issue price gave out a warning signal that a major change in sentiment may be around the corner," Wong said.
Index heavyweight China Mobile fell 0.95 percent to HK$78.10. HSBC was down 0.96 percent at HK$87.85 and Bank of China slipped 0.73 percent to HK$4.08.
Turnover was HK$32.66 billion ($4.2 billion), from Thursday's HK$46.8 billion.
The China Enterprises Index of top locally listed mainland Chinese stocks was down 0.66 percent at 11,968.06.
Menswear retailer China Lilang fell to as low as HK$3.63 on its trading debut, 6.9 percent below the issue price of HK$3.90 before steadying at HK$3.81 by midday.
"Sentiment turned negative on IPOs after MCC's poor performance and Lilang was under the cloud," said Alfred Chan, chief dealer at Cheer Pearl Investment.
Lilang's debut came a day after Metallurgical Corp of China (MCC) marked Hong Kong's worst debut this year. MCC shares, which fell as much as 13 percent on Thursday, rebounded 2.14 percent to HK$5.73 but still below the issue price.
SJM fell 5.2 percent to as low as HK$4.23, its lowest since Sept 15, before settling at HK$4.35, down 2.47 percent, after the casino operator announced a plan to issue HK$2 billion ($258 million) bonds convertible, raising fund for capital expenditure for Macau developments.
Real Gold Mining fell 17.5 percent to as low as HK$9.32 before steadying at HK$9.55, down 15.49 percent from the previous close. The gold producer said it would sell HK$1 billion new shares to controlling shareholder at a discount, raising capital to fund acquistion of gold mining projects.
SHANGHAI FALLS AS METAL STOCKS DOWN
China's key stock index was down 1.36 percent by midday, led by metal stocks following news of EU tariffs, ending a short-lived technical bounce on Thursday under heavy pressure from new share supply, including initial public offerings.
The Shanghai Composite Index fell to 2,814.851 points, wiping out a 0.4 percent gain on Thursday and heading for a weekly fall of 5 percent this week as the China Securities Regulatory Commission is pushing more shares into the market.
In a flurry of of fundraisings, China International Travel Service Corp, the country's top tourist agency, said on Friday that it raised 2.6 billion yuan ($381 million) in a Shanghai IPO this week to fund expansion.
Metals stocks fell after news that the European Union decided to impose five-year anti-dumping tariffs on aluminium foil from three countries including China, and on Chinese seamless steel pipes. [ID:nSHA136303]
Top steelmaker Baoshan Iron and Steel dropped 1.35 percent to 6.56 yuan, while Aluminum Corp of China Ltd (Chalco) fell 2.13 percent to 12.84 yuan.
Trading was sluggish with the approach of an eight-day holiday starting on Oct. 1, the country's National Day, seen as a major political event as it marks the 60th anniversary of the founding of the People's Republic of China.
"While share supply remained the top concern of the market, the disappearance of an opportunity to take profit before the National Day holiday pushed many investors to quit the market," said Wu Xiong, research manager at Orient Securities in Shanghai.
The index has several times this week slipped below the key 125-day moving average, now at 2,857 points and the landmark for a bear market among Chinese investors.
But analysts said the index had not yet convincingly breached that level, leaving leeway for a possible technical bounce.
Traders said they believed the main index may find support at a three-month low of 2,639, hit on Sept. 1, before the holiday, although they saw little chance for the index to regain the psychologically important 3,000 point level before the break.
Haitong Food Group, one of the 10 most actively traded stocks in the morning, bucked the market's downtrend and jumped its 10 percent daily limit to 14.14 yuan after it announced a major corporate restructuring, which many investors believed might benefit the company's long-term development.
Metallurgical Corp of China (MCC), the morning's most active stock, fell 2.5 percent to 5.86 yuan. Sentiment towards MCC, the Shanghai bourse's youngest counter, was hit by a very weak listing debut in Hong Kong on Thursday. (Editing by Chris Lewis)