* HK shares bounce off one-month low in thin volume
* China steel stocks soar on iron ore deposit discovery
* Shanghai Composite Index headed for 3,300 pts, brokers (Updates to close)
By Parvathy Ullatil & Claire Zhang
HONG KONG, June 24 (Reuters) - Chinese stocks rose 1.02 percent to a one-year closing high on Wednesday, led by metal and steel shares, as more signs pointed to an economic recovery.
Hong Kong shares outperformed the region with a 2 percent jump, with advancing stocks outnumbering decliners 3:1, but turnover slid to a one-month low ahead of the outcome of the U.S. Federl Reserve meeting.
Steel stocks outshone the broad market after China said it had discovered Asia's biggest iron ore deposit in Liaoning province, just as Chinese steel mills entered the final round of negotiations over pricing with global ore suppliers.
Baoshan Iron and Steel, China's largest steelmaker, climbed 3.0 percent to 7.2 yuan, while Bengang Steel Plates, whose parent, Benxi Iron & Steel, owns a share in the deposit, surged by its 10 percent daily limit to 7.48 yuan.
Hong Kong-listed Angang Steel whose base of operation neighbours the deposit rose 5.3 percent to HK$13.06.
TURNOVER DRIES UP IN HONG KONG
The benchmark Hang Seng Index closed up 353.78 points at 17,892.15 after vacillating ahead of results of the U.S. Federal Reserve meeting.
Some of the gains could also be attributed to index futures-related trading, said brokers, ahead of the contract expiry next Monday.
Turnover slowed to a one-month low of HK$56.7 billion from Tuesday's HK$66.2 billion.
"Investors are unwilling to take sides after the whipsaw action we have been seeing in recent days," said Alex Wong, director with Ample Finance.
Wong said he expected the main index to climb above 18,000 points on Thursday, but saw a strong resistence at 18,400 points, the previous support for the the gauge.
"There is also concern over what the Fed will have to say about interest rates later," he said.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, rose 2.4 percent to 10,530.35.
Chinese internet portal Tencent Holdings jumped 5.7 percent to HK$90.05 after it signed a deal with Take-Two Interactive Software Inc to develop and distribute online versions of Take-Two's popular NBA 2K basketball video game.
Goldman Sachs said in a report that NBA 2K could add around 4 percent to the company's estimated revenue and earnings in 2011 if it proved as successful as Tencent's QQ Speed and Cross-Fire games.
Chinese property stocks advanced on signs demand and prices in the mainland residential real estate market were on the rebound. China Overseas Land gained 5 percent, while Sino-Ocean Land jumped 6.6 percent.
JPMorgan said prices were likely to rise by another 8 to 15 percent in 2009 after a 5 to 20 percent rebound from late 2008.
Manulife Financial struggled for a third straight session on Wednesday following the Ontario Securities Commission's probe into the Canadian insurance giant's disclosure of risks in its variable annuity and segregated funds.
The stock dropped 1.8 percent to HK$138.80, adding to its 11 percent decline in the last two sessions.
ANTA Sports Products rose 5.6 percent to HK$9.39 on news of the branded sportswear maker's partnership with the Chinese Olympic Committee between 2009-2012.
The deal would see China's sports delegation using ANTA products at 11 international events, including the London Olympics in 2012, the company said.
SHANGHAI AT 12-MONTH HIGH
The Shanghai Composite Index ended up 29.602 points at 2,922.299, the highest closing level since June 18, 2008.
The index has gained 60 percent so far this year, and has rebounded 76 percent from last-year's low of 1,664 points, hit in Oct. 2008.
"The 3,300-point level will be hit sooner or later, with expectations China's economic recovery could be sooner than overseas," said Xiangcai Securities analyst Li Shiming.
Guotai Junan Securities said this week that the index might correct in the third quarter, but the overall trend in the second half of the year would be positive.
Gaining Shanghai A shares outnumbered losers by 690 to 212, while turnover in Shanghai A shares was active at 146.3 billion yuan ($21.4 billion) against Tuesday's 144.1 billion yuan.
Jiangxi Copper raced up by its 10 percent daily limit to 32.40 yuan, as a weaker U.S. dollar pushed copper higher on Wednesday. Zhongjin Gold soared 10 percent to 62.28 yuan.
Bank shares eased after leading gains on Tuesday. The country's biggest lender, Industrial and Commercial Bank of China, slipped 1.1 percent to 5.36 yuan after gaining 1.31 percent on Tuesday.
Bank of China dropped 1.05 percent to 4.72 yuan, after surging 6 percent on Tuesday when a rumour that reserve ratios could be cut helped lift bank shares.
A commentary carried by the official Shanghai Securities News on Wednesday said the central bank was unlikely to reduce the ratio of bank reserve requirements as liquidity in China's interbank market remained abundant despite a drain due to IPOs.
The Shanghai Securities News reported that China's banking regulator had instructed banks to avoid sudden lending surges at the end of each month and to make sure all loans were channeled to help boost the economy.
Airlines outperformed, with Air China jumping 4.23 percent to 7.14 yuan. Airlines were buoyed by regulatory approval for China Eastern Airlines' $1.02 billion share placement to its parent in exchange for 7 billion yuan in cash, moving it a step closer to a state-backed merger with smaller rival Shanghai Airlines. (Editing by Chris Lewis)