* BoCom falls after posting flat quarterly profit
* Nine Dragons tumbles on new share sale plan
(Updates to midday)
By Jun Ebias and Claire Zhang
HONG KONG/SHANGHAI, Oct 29 (Reuters) - Shares in Hong Kong and China eased on Thursday, as weak overseas markets spurred move profit taking, while Nine Dragons' plan to sell new shares further dampened investor sentiment toward the mainland firm.
In Shanghai, China's key stock index sank 2.1 percent, with blue-chip shares soft as more supplies hit the market, while investors shifted some of their attention to the ChiNext start-up market due to debut on Friday.
The benchmark Hang Seng Index eased 2.42 percent or 525.70 points to 21,235.88 at midday. Turnover was HK$47.68 billion ($6.2 billion), versus midday Wednesday's HK$40.00 billion.
"Funds appear to be locking in profit as the month end approaches," said John Mar, co-head of sales trading, Daiwa Securities SMBC. "Given that we are near the top of recent trading ranges, market direction has been taking a lead from overnight moves in the U.S. markets."
Bank of Communications (BoCom) shed 5.98 percent, after reporting a flat quarterly net profit.
"There wasn't much of a positive surprise in it's third-quarter results, so it's down a bit more than the other banks," said Paul Lee, an analyst at Tai Fook Securities. The bank will likely post low single-digit growth in net profit for the whole of 2009, he added.
Citi reiterated its sell' recommendation on BoCom, noting that the lender has the lowest tier 1 capital ratio among its peers, which could be a constraint on future loan growth.
Index heavyweight HSBC Holdings lost 1.73 percent and Bank of China was 2.70 percent lower.
The China Enterprise Index of top locally listed mainland Chinese stocks dropped 3.08 percent to 12,436.50.
PetroChina fell 4.82 percent. The oil producer posted a 23.5 percent decline in quarterly net profit as a steep slide in crude oil prices hurt earnings.
Other oil firms were also down. CNOOC fell 3.99 percent, while Sinopec lost 1.49 percent.
In Shanghai, PetroChina, the most heavily weighted share in the index, fell 1.57 percent to 13.18 yuan.
Nine Dragons Paper tumbled 10.84 percent. The packaging and paperboard maker said it would sell HK$2.87 billion ($370 million) worth of new shares to its controlling shareholder.
Bucking the trend, Geely Automobile rose 1.74 percent. Ford Motor Co named Geely's major shareholder as preferred bidder for its loss-making Swedish unit Volvo.
Zijin Mining fell 4.56 percent, even after reporting a 15.1 percent jump in quarterly profit.
Lianhua Supermarket Holdings lost 3.32 percent, after reporting a 329.9 million yuan net profit in January-September, without giving comparative figures.
Wynn Macau extended its decline and slid 3.62 percent. The stock ended 7.03 percent lower on Wednesday after its parent, Wynn Resorts, gave a downbeat outlook.
SHANGHAI DROPS
The Shanghai Composite Index ended the morning at 2,967.521 points, with losing Shanghai A shares outnumbering gainers 754 to 132. Turnover edged up to 62 billion yuan from Wednesday morning's 60 billion yuan.
China State Construction Engineering Corp, China's biggest home builder, fell 6.98 percent to 4.80 yuan and was the most actively traded stock after saying 6 billion shares emerged from a lock-up and became tradeable on Thursday.
Investors cashed in profits on the shares, which surged when they listed in Shanghai three months ago, analysts said.
"The fall on overseas markets encouraged selling, and blue chips' weakness could drag the index another 100 points lower," said Li Wenhui, senior analyst at Huatai Securities in Nanjing.
"Investors are also keeping a close eye on ChiNext, to see its impact on the main board." ChiNext, a Nasdaq-style second board for start-ups, is due to begin trade in Shenzhen this Friday with an initial batch of 28 listed companies, and analysts said a strong debut performance could divert money and attention away from the main board.
Some expected the Shanghai benchmark index may initially move lower to test support around its 125-day moving average, now at 2,930 points.
Property shares were weak, with China Vanke dropping 3.44 percent to 11.52 yuan, while Jiangxi Copper sagged 3.86 percent to 37.88 yuan as Shanghai copper futures prices fell to one-week low.
Steel shares were soft, with Wuhan Steel losing 2.30 percent to 7.23 yuan. The U.S. Commerce Department said on Tuesday it had set preliminary duties on imports of concrete steel wire strand and steel grating from China to offset government subsidies.
But health-related shares were strong after Beijing reported its first death from H1N1 flu. Shenzhen Neptunus Bioengineering soared 8.20 percent to 16.62 yuan.
(Editing by Jonathan Hopfner)