* HK shares fall; mining and oil counters weigh
* China stocks firm as funds from MCC IPO unfrozen
* Chinese tyre makers fall on China/U.S. trade spat (Update to midday)
By Claire Zhang and Donny Kwok
HONG KONG, Sept 14 (Reuters) - Hong Kong shares fell on Monday tracking a softer tone in overseas markets, but further downside is seen limited with firmer mainland stock markets and hopes for recovery in the world's third-largest economy giving support.
China's key stock index gained 0.25 percent on Monday, after breaching major resistance at 3,000 points, but with tyremakers acting as a drag on sentiment following a selldown following a trade spat between China and the United States.
Dealers said funds unfrozen for Metallurgical Corp of China's (MCC) share applications since Friday, may flow back into equities and help prop up the mainland stock market.
Weaker copper and oil prices weighed on mining and energy stocks in Hong Kong with China's key copper producer Jiangxi Copper losing 1.7 percent and the world most valuable oil and gas producer PetroChina sliding 0.8 percent.
Copper fell to near two-week lows and oil fell more than a dollar toward $68 per barrel on Monday as a rebound in the beaten-down U.S. dollar.
The U.S. dollar crawled up on Monday from a one-year low against a basket of currencies.
"The underlying tone of local stocks remains firm and the local market may trim losses if the mainland markets stay firm," said Conita Hung, head of equity research of Delta Asia Financial. "Players also keep tracking the U.S. dollar for hints of direction."
By midday the benchmark Hang Seng Index was down 0.94 percent at 20,962.46. But turnover was a thin HK$29.1 billion (US$3.8 billion) with investors reluctant to bet on a further upside after the recent strength.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was down 0.63 percent at 12,190.32.
Zijin Mining, bucking weak sentiment, rose 1.8 percent to HK$7.81. The miner said it would participate in a bid for a 50 percent stake in Zijin Copper, which is sold by Minxi Xinghang, Zijin Mining's controlling shareholder.
CHINESE TYRE MAKERS FALL
The Shanghai Composite Index ended the morning firmer at 2,997.320 points, after crossing key resistance at 3,000 points for the first time since Aug. 24.
The index gained 2.22 percent on Friday, buoyed by strong August data that signalled China's recovery was well on track.
Gaining Shanghai A shares outnumbered losers by 751 to 161, while turnover rose to 76 billion yuan ($11 billion) from a thin 62 billion yuan on Friday morning.
Share prices of Chinese tyremakers, led by major producer Double Coin, plunged on Monday after a weekend U.S. decision to levy an extra duty on Chinese-made tyres, sparking a new trade dispute between the two global economic giants.
China's Commerce Ministry said on Sunday that it had launched an anti-dumping investigation into imports of U.S. chicken products and vehicles in apparent retaliation.
Double Coin plunged its daily 10 percent limit to 19.01 yuan, while Guzhou Tyre dropped 5.7 percent to 15.10 yuan.
"Investors are worried that protectionism might hurt already soft Chinese trade, with the index only managing a small rebound, partly helped by funds unfrozen from MCC's IPO," said Wen Lijun, analyst at Nanjing Securities.
Rising tensions between China and the United States could further hurt sluggish Chinese exports.
China said on Friday that August exports fell about 23 percent from a year earlier, while imports were down about 17 percent, both lagging forecasts.
Concerns over upcoming share supply from newly listed issues may drain money from the main broad, keeping a lid on the index at around 3,000 points for days, analysts said. China's securities regulator will begin auditing applications this week from seven companies that want to list on its much-anticipated second board, state media reported on Monday.
Gold shares were firmer, with Shandong Gold rising 2.6 percent to 65.53 yuan. Spot gold rose 0.4 percent to $1,008.70 per ounce as of 0001 GMT after hitting $1,011.55 on Friday, its highest since March 2008. [ID:nT108814]
The property sector was strong, with China Vanke advancing 1.6 percent to 11.74 yuan, while China's biggest homebuilder, China State Construction Engineering climbed 0.6 percent to 5.34 yuan after saying the value of new construction contracts that it had signed in the first eight months of the year rose 20.4 percent from a year earlier to 224.7 billion yuan. (Editing by Chris Lewis)