* Aug lending data boosts China bank & property shares
* Gains in Shanghai limited as MCC IPO freezes up $234 bln
* HK, China markets headed for strong weekly gains
By Parvathy Ullatil and Claire Zhang
HONG KONG, Sept 11 (Reuters) - China and Hong Kong shares rose on Friday after August data signalled a recovery was well on track in the world's third-largest economy.
Chinese industrial output, investment and credit all grew more quickly than expected in August.
"China's growth is increasingly being driven by consumption and private sector investment, reducing the dependence on fiscal stimulus, lowering the risk of "wasteful investment" and policy intervention," said analysts with Morgan Stanley in note on Friday.
Bank stocks were among the top gainers on Friday after data showed banks extended 410.4 billion yuan ($60.11 billion) in new local-currency loans in August, up from 355.9 billion in July.
Yuan lending in the first eight months totalled 8.15 trillion yuan, far exceeding what the government had said was its minimum target of 5 trillion yuan for all of 2009. Regulators now expect the full-year total will be nearer to 10 trillion yuan.
Industrial and Commercial Bank of China, the world's largest lender, rose 1.4 percent in Hong Kong while China Merchants Bank gained 2 percent at 14.43 yuan in Shanghai.
GAINS LIMITED AFTER RECENT RALLY
By midday the benchmark Hang Seng Index was up 0.8 percent at 21,237.48.
But turnover stayed skimpy at HK$33.9 billion ($4.37 billion), with investors reluctant to bet on a further upside after the main index scaled its highest level since August 2008 on Thursday.
The index has piled on more than 1,700 points since last Wednesday while blue chip stocks are trading at over 18 times their estimated earnings.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was up 1.1 percent at 12,347.01.
Energy stocks rose after oil prices extended a four-day rally to over $72 a barrel on Friday after a U.S. report showed a surprise decline in crude stockpiles and OPEC said it would maintain official output curbs. Shares in offshore oil producer CNOOC gained 2.4 percent to HK$11.04 while Asia's largest oil and gas producer PetroChina was up 2.1 percent at HK$9.23.
China's crude oil imports in August surged about 25 percent to a near record high of 19.6 million tonnes, indicating strong demand for the commodity.
Shares in port operator China Merchants Holdings advanced 4.8 percent to HK$28.45 after the company's first-half earnings matched forecasts, while analysts cheered its ability to minimise profit declines, at 14.4 percent, amid a tough operating environment.
Morgan Stanley raised its target price on the stock to HK$30.66 from HK$26.80 saying it was in the best position, among its peers, to benefit from the recovery in trade volumes.
WEN'S COMMENTS BOOST CONFIDENCE
The Shanghai Composite Index ended the morning 1.2 percent higher at 2,959.999 points, after snapping a seventh rising session on Thursday as investors cashed in recent gains ahead of the country's August economic data.
"Both M2 and new loan data rose from last month. The stock market rebound can be expected to continue," said chief strategist Yu Jun at CITIC Securities in Beijing.
Premier Wen Jiabao's remarks on Thursday about policy also underpinned the market's positive sentiment.
Wen told the World Economic Forum in Dalian that China would unswervingly apply its policy mix of massive government spending and loose money because its economic recovery remained fragile.
The index is heading for a 3.4 percent gain so far this week after edging up just 0.03 percent last week.
Gaining Shanghai A shares outpaced losers by 802 to 110, while turnover remained little changed at a thin 62 billion yuan ($9 billion) from Thursday morning.
China's industrial output expanded in August at the fastest rate in 12 months and narrowly topped forecasts, showing that the economy was well on the road to recovery.
But August exports fell about 23 percent from a year earlier, while imports were down about 17 percent, lagging forecasts.
"The data is generally in line with expectations, plus Wen mentioned inflation. Investors can draw more confidence about the economic recovery, so the index could ride higher," said Xu Yinhui, senior analyst at Guotai Junan Securities in Shanghai.
Although most of the data was more upbeat than July, sentiment remained cautious as profit-taking pressure lingered, some analysts said.
"Large caps seem to be losing momentum and with small turnover it's hard for the index to tackle the 3,000 resistance level for the moment. There is profit-taking pressure," said Li Wenhui, senior analyst at Huatai Securities in Nanjing.
Metallurgical Corp of China (MCC), which is raising up to $5.3 billion in the world's second-largest initial public offering this year, has seen the subscriptions to its Shanghai portion of the IPO freezing up a huge 1.6 trillion yuan ($234 billion).
Part of the money unfrozen for unsuccessful bidders may flow back to the stock market on Friday and Monday.
The property sector led gains as investment growth accelerated sharply and prices and sales continued to rise in August. Industry leader China Vanke climbed 2.48 percent to 11.59 yuan. (Editing by Jonathan Hopfner)