* Sichuan Expressway triples in Shanghai debut trade
* China shares jump for 4th day to end at 14-month high
* HK shares gain for 3rd day; finish at highest since Sep 08
* Chalco brushes off loss warnings to jump in both markets (Updates to close)
By Parvathy Ullatil iand Claire Zhang
HONG KONG, July 27 (Reuters) - Hong Kong and China shares scaled new multi-month peaks in a liquidity bounce on Monday while Sichuan Expressway raced ahead in its impressive debut, marking the end of a year-long IPO drought on the Shanghai exchange.
Chinese toll road operator Sichuan Expressway <601107.SS> more than tripled from its IPO price in its market debut, twice triggering exchange circuit breakers that temporarily suspended trade in the shares.
Although the price had been expected to rise due to the company's strong growth prospects and a relatively low IPO price, analysts warned that Monday's surge was driven by excessive speculation.
The stock rose 5.6 percent to HK$3.60 in Hong Kong. Local-currency A shares finished at 10.90 yuan, up from an IPO price of 3.60 yuan, giving its A shares a dramatic 233 percent premium over the closing price for its Hong Kong-listed H shares.
"The IPO was being chased by a lot of people, so it was driven by liquidity and a supply/demand mismatch in Shanghai but investors in Hong Kong have been a lot more rational," said Peter Lai, director with DBS Vickers in Hong Kong
LAGGARDS, RECOVERY-THEMED STOCKS FAVOURED IN HK
The benchmark Hang Seng Index closed up 1.4 percent at 20,251.62, with shares worth HK$80.9 billion changing hands compared with Friday's HK$83.6 billion.
The index rose to 20,385.69 earlier in the session, its highest level since Sept. 9 last year.
Index laggard China Mobile <0941.HK> led with a 4.2 percent jump to HK$80.35. The stocks which has climbed a mere 3 percent this year, against the blue chip index's 41 percent advance, is expected to find favour with investors as the sharp rally in the region tapers off.
The index is expected to meet resistance at 20,500 points, while some of its gains may be wiped off after index futures expire on Wednesday.
Property stocks surged, with home sales and prices continuing to climb as demand picks up pace in the low interest rate environment and while supply remains tight. Top developer Sun Hung Kai Properties rose 3.4 percent while conglomerate New World Development advanced 3.6 percent.
"Hong Kong's main difference from any other property market in the world is its very low supply. This sets the base for a very strong rebound as the economy recovers and liquidity seeps back into the system," said Eric Wong, analyst with UBS.
UBS raised its property price forecasts across the board, estimating a 32 percent increase in home prices between June 2009 to December 2010.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was up 1.7 percent at 12,189.62.
China Shenhua Energy extended Friday's gains to advance 3.9 percent following strong power output data last week, which bodes well for coal demand.
Power plant equipment maker Harbin Power rose 9 percent, while Shanghai Electric jumped 7.8 percent.
Other recovery-themed sectors also surged, with China's largest shipping conglomerate China COSCO zooming up 9.1 percent, while container-line operator China Shipping Container Lines soared 15 percent.
Macau's casino stocks gained on Monday after the gambling haven chose a new chief executive over the weekend, with no chnages expected to gaming policy.
Galaxy Entertainment rose 3.1 percent, while Melco International Development tacked on 2.1 percent.
Aluminum Corp of China (Chalco) gainde 4.5 percent as investors shrugged off a warning from the world's No.3 alumina producer of a loss in the first half of 2009 on low aluminum demand and prices and focused on future earnings prospects and surging Shanghai aluminium prices.
Chalco shares jumped 8.05 percent to 19.33 yuan in Shanghai.
IPO FEVER RAGES IN SHANGHAI
Chinese stocks climbed 1.86 percent to a 14-month closing high on Monday, with metal and airline shares strong.
The Shanghai Composite Index ended up1.86 per cent or 62.609 points at 3,435.212. Gaining Shanghai A shares outnumbered losers by 786 to 139, while turnover for Shanghai A shares jumped to a 26-month high of 240.0 billion yuan ($35.1 billion) from Friday's 223.0 billion yuan.
A massive volume of funds frozen in subscriptions to last week's initial public offering by China State Construction Engineering Corp were returned on Monday, helping to boost the market.
"The release of funds and ample liquidity are fuelling a rally despite a series of IPOs that will bring fresh supplies of shares in coming days," said Zhou Lin, an analyst at Huatai Securities in Nanjing. He said the uptrend for the index in the short term remained unchanged.
Wu Nan, an analyst at Xiangcai Securities in Shanghai, added: "I don't know what to say about such a crazy market. Most people know it's full of risk, but investors are trading feverishly in a pack as the market seems very reluctant to drop at all. Speculative sentiment could push it higher."
Brokerage shares surged, with CITIC Securities climbing 4.8 percent to 36.38 yuan, on expectations of a boost from the market rally and business from share offerings, which the stock regulator is encouraging to cool the market with additional supplies of equity.
China's Everbright Securities will begin book-building on Tuesday as it launches an IPO worth about 10 billion yuan, only the country's second IPO by a securities brokerage. [ID:nSHA69082] Its controlling shareholder China Everbright <0165.HK> vaulted 11.3 percent to HK$25.10.
The official Shanghai Securities News reported that China State Construction, which last week raised 50.2 billion yuan in the world's largest IPO so far this year, will list its shares on Wednesday.
The Financial News reported that the first day of business for China's long-anticipated second board for start-up companies attracted 108 applications for IPOs.
Airline shares soared, with China Eastern Airlines <600115.SS> rising its 5 percent daily limit to 6.22 yuan after the official Shanghai Securities News cited an internal company meeting as saying that the airline's parent company swung to a profit in the first half of this year [ID:nSHA99399]. China Southern Airlines <600029.SS> raced up by its 10 percent daily limit to 6.44 yuan. (Editing by Edmund Klamann and Chris Lewis)