* HSI closes above 21,000 for first time since Sep 2008
* China shares snap four day losing streak; turnover shrinks
* Tencent, HKEx jump ahead of Q2 earnings on Wednesday (Updates to close)
By Parvathy Ullatil and Claire Zhang
HONG KONG/SHANGHAI, Aug 11 (Reuters) - Hong Kong shares rose 0.7 percent on Tuesday as select stocks including Chinese Internet portal Tencent and bourse operator HKEx were snapped up on hopes of solid earnings growth in the second quarter.
Chinese stocks rose 0.5 percent on Tuesday, ending a four-session losing streak, with property shares firm as economists said China's economic recovery appeared intact after mixed economic data for July.
Although the below-forecast July output data disappointed, retail sales were strong and exports posted a month-on-month rise, while economists said the economic recovery was still on track despite indications it was taking a breather.
HSI ABOVE 21,000 PTS
The benchmark Hang Seng Index finished up 144.69 points at 21,074.21, ending above the 21,000-point level for the first time since September 2008.
But turnover dropped to an anaemic HK$65.7 billion from Monday HK$71.4 billion.
"This is the first time the index has closed above the 21,000-point level this year, but overall sentiment is very mixed. Given the low turnover today, it looks like the big market movers are not buying now," said Andrew To, sales director with Taifook Securities.
The main gauge has risen 46.5 percent so far this year while valuations of blue-chip stocks have pushed beyond 21 times, nearly double what they were worth when the market troughed in October 2008.
Tencent, which operates China's largest online messaging community, jumped 5.7 percent to HK$117.50 before its second-quarter earnings announcement on Wednesday.
BNP Paribas estimated a second-quarter net profit of 1.15 billion yuan ($168.3 million) for Tencent, a 13.5 percent increase from the first quarter and an 83.3 percent jump from a year earlier, on increased contributions from and improved profitability at its gaming business.
Hong Kong Exchanges & Clearing jumped 3.8 percent to end at a 15-month closing high of HK$151.90. The world's largest stock exchange operator by market value is expected to report a more or less flat performance in the second quarter of 2009, ending four successive quarters of shrinking earnings growth.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was up 0.7 percent at 11,988.79.
Dongfeng Group, China's third-largest carmaker, continued to climb on strong sales growth data for July. The stock was up 11.7 percent at HK$8.88. China's car sales in July jumped 70.54 percent from a year earlier to 832,600 units, as Beijing's policy incentives continued to boost demand.
Angang Steel gave up 3.2 percent while smaller rival Maanshan Iron and Steel fell 5 percent as record high steel output data for July stoked fears of further increases in iron ore prices.
Bank of East Asia, Hong Kong's fifth-largest lender, climbed 3.2 percent after a top company executive told Reuters it was planning to list in Shanghai next year.
VOLUMES DROP IN SHANGHAI
The Shanghai Composite Index closed at up 0.5 percent or 14.966 points at 3,264.726 points. Gaining Shanghai A shares outnumbered losers by 585 to 334, while turnover for Shanghai A shares dropped to a six-week low of 122.2 billion yuan ($17.9 billion) from Monday's 152.6 billion yuan.
Turnover shrank sharply as sentiment remained cautious after a recent pull-back spurred in part by concerns about tightening market liquidity, which were confirmed by a sharp fall in new bank lending data for July.
"The data for July is generally in line with expectations, without a significant improvement or worsening, and the index is likely to remain in a consolidation phase," said Central Securities analyst He Weijiang.
The central bank said on Tuesday that banks extended 355.9 billion yuan ($52.08 billion) in new local-currency loans in July, down from 1.53 trillion yuan in June and a sharper fall than many analysts had forecast, although the second half had been widely expected to see a marked slowdown in lending.
Analysts said the drop-off in turnover had damped near-term prospects for a market rebound.
"The light turnover suggests sentiment is cautious and investors are reluctant to buy or sell, while new lending was much lower than expected in July and could remain low for the rest of the year," said Haitong Securities analyst Zhang Qi.
But sentiment got a boost from news of the approval of new funds, suggesting the government may be aiming to cushion the impact of the lending slowdown on stock market liquidity.
Official media reported that three domestic funds recently received the green light from regulators and would be launched soon, breaking a two-week lull in new approvals, while Korea Investment Trust Management obtained a licence to invest in China's securities markets under the QFII scheme.
Property shares rose with developer China Vanke up 1 percent at 12.67 yuan.
Metal shares were soft with Jiangxi Copper sliding 3 percent to 42.50 yuan.
China Eastern Airlines climbed 2.5 percent to 6.15 yuan after returning to the black in the first half of 2009, while saying it would actively push ahead with its acquisition of Shanghai Airlines in the second half. Shanghai Airlines gained 4.2 percent to 6.68 yuan.
Two new stocks staged strong debuts in Shenzhen. Shanghai SK Petroleum Chemical Equipment soared 95 percent from its IPO price to 31.20 yuan and Beijing Join-Cheer Software surged 109 percent to 56.29 yuan. (Editing by Edmund Klamann and Chris Lewis)