* HK stocks rise for 5th session; close at 10-mnth high
* Shanghai shares end at 13-mnth closing high
* China banks, properties lag on C.banker warning
By Parvathy Ullatil and Claire Zhang
HONG KONG/SHANGHAI, July 20 (Reuters) - Hong Kong shares soared 3.7 percent in their fifth straight winning session to a level last seen in the wake of Lehman Brothers' collapse and after data last week reinforced investor faith in China's economy.
Elsewhere, Chinese stocks jumped 2.4 percent on Monday to a new 13-month closing high while turnover surged to its highest in nearly 26 months, with metal and coal shares strong.
But a warning from China's top banking regulator on Sunday on the risks of surging bank lending and the dangers of unhealthy growth in the property market dampened sentiment.
Several bank shares underperformed in Shanghai, while property shares were weak. The country's biggest lender, Industrial & Commercial Bank of China, was up 0.57 percent at 5.27 yuan while property leader China Vanke fell 0.78 percent at 13.96 yuan.
TURNOVER PICKS UP IN HONG KONG
The benchmark Hang Seng Index finished 696.71 points higher at 19,502.37, after hitting 19,506.42 points earlier, its highest level since Sept 22, 2008.
The China Enterprises Index, which represents top mainland Chinese stocks, rose 4 percent to 11,593.13, riding the rally on the Shanghai Composite Index.
"Some institutional investors seem to come back to the market after last week's Chinese GDP upgrades," said Steven Leung, director with UOB Kay Hian.
"But the comments from the Chinese central bank seem to suggest the government may undertake drastic measures to control the banking and property sector. This will limit the rally, which is overdone now."
Turnover increased to a five-week high of HK$77.7 billion with some analysts betting that liquidity overflows from China could pump up volumes further in coming weeks.
"Chinese money, no matter how much, cannot sustain a change in the global capital's view on valuation," said Morgan Stanley's Jerry Lou and Allen Gui.
"If Chinese money should rush into Hong Kong to substantially rerate the stock market, we recommend that investors sell into the last hurrah."
Chinese insurers surged as mainland China-listed stocks extended their rally, moving to a new 13-month high on Monday and building up hopes for solid investment income at insurers.
China Life, the world's largest insurer, piled on 6.5 percent, while smaller rival Ping An jumped 10.3 percent to an almost 14-month closing high of HK$65.50.
Shares in property conglomerate Wharf Holdings and Swire Pacific rose after Morgan Stanley raised its price target on the stocks.
Swire Pacific, which is a big shareholder in Cathay Pacific advanced 6.6 percent to HK$86.36 after the U.S. investment bank raised its rating to overweight with a target price of HK$87. Shares in Wharf jumped 7.4 percent to HK$34.70 after the brokerage set a target price of HK$37 on the stock while keeping its overweight rating.
Other property developers also tacked on strong gains, lifted by further evidence of a rebound in residential property demand and home prices.
Cheung Kong Holdings, billionaire Li Ka-shing's property flagship, sold nearly a third of the apartments in a newly launched project in three days, according to media reports. The stock rose 5.6 percent to HK$97.55 after Citigroup raised its target price on the stock to HK$107.84 on expectations the developer would benefit from momentum in the Hong Kong home market and a continued recovery in China.
SHANGHAI
The Shanghai Composite Index ended at 3,266.920 points, posting its biggest one-day percentage gain in seven weeks.
Gaining Shanghai A shares outnumbered losers by 765 to 149, while turnover for Shanghai A shares surged to 233.5 billion yuan ($34.2 billion) from Friday's 186.1 billion.
Metal shares led gains for a second session, with Aluminum Corp of China, China's top aluminium maker, and Jiangxi Copper surging by their 10 percent daily limit.
China International Capital Co said on Friday that the economic recovery could boost demand for aluminium and push up prices.
Coal shares were lifted for a second day by positive June power data, with China Shenhua Energy climbing 5.36 percent to 36.17 yuan.
But Sinolink Securities said in a recent note that it did not expect policy makers to take actions that would greatly harm the property industry, given its leading role in lifting the economy.
Zhou Lin, an analyst at Huatai Securities in Nanjing, added: "The outlook for these two sectors in the medium term is positive."
Other financial shares were firm, with China Life surging 8.07 percent to 32.40 yuan.
Water supply shares outperformed, with Jiangxi Hongcheng Water Works racing up its 10 percent daily limit to 10.42 yuan. Media reported that some cities planned to hike water prices because of the exceptionally hot summer.
The market is closely watching a share offering by China State Construction Engineering Corp (CSCEC), the world's largest initial public offering so far this year, which will take subscriptions on Tuesday and Wednesday but is not expected to make big waves in the market.
"The market is very strong although there is a risk that it could pull back, but the subscription process seems unlikely to do much damage," said He Weijiang, an analyst at Central China Securities in Shanghai. (Editing by Edmund Klamann & Jan Dahinten)