* China growth outlook lifts HK, Shanghai shares
* Foxconn rallies on upbeat handset industry forecast (Updates to close)
By Jun Ebias and Claire Zhang
HONG KONG/SHANGHAI, Oct 19 (Reuters) - China and Hong Kong stocks rose on Monday on expectations that China's third-quarter growth probably beat forecasts, while Foxconn International rallied on a rosy outlook for the handset industry.
China's gross domestic product likely expanded 8.9 percent from a year earlier in the third quarter, a Reuters poll showed. GDP and other key economic data are due for release on Thursday.
China's key stock index rose 2.07 percent to a one-month closing high on Monday, led by property shares on upbeat sales and expectations of solid third-quarter earnings.
"China's economy is growing as a result of higher domestic demand and an improvement in exports," said Steven Lam, vice-president at Karl-Thomson Securities. "This optimism is reflected in the stock market."
The benchmark Hang Seng Index ended up 1.23 percent, or 270.56 points, at 22,200.46, its highest since Aug. 1, 2008. Turnover was HK$60.6 billion ($7.82 billion), down from Friday's HK$68.6 billion.
China's gross domestic product grew more than 7 percent in the first nine months of the year, a senior official at the country's top economic planning agency said.
Contract cellphone maker Foxconn International advanced 9.03 percent, gaining for a fifth straight session, on a strong earnings outlook.
Bank of America Merrill Lynch recently raised its target price on Foxconn to HK$6.80 from HK$5.80 in anticipation of a recovery in the handset industry. The bank reiterated its "buy" recommendation on the stock.
BOC Hong Kong was up 4.27 percent. CIMB on Monday raised its target price to HK$20.80 from HK$19.20 and reiterated its "outperform" recommendation, as it expects the lender's earnings and return on equity (ROE) to rebound next year.
Oil firms CNOOC was 4.19 percent higher and PetroChina was up 3.01 percent on higher oil prices.
Hysan Development erased earlier losses to close up 3.42 percent. The property company said on Monday that chairman and acting CEO Peter Lee had died at his home on Oct. 17, aged 55. The board has appointed David Akers-Jones as acting chairman.
The China Enterprises Index of top locally listed mainland Chinese companies rose 1.54 percent to 12,947.73, led by a 5.76 percent gain in R&F Properties.
SHANGHAI ALSO RISES
The Shanghai Composite Index ended at 3,038.273 points, adding to last week's gain of 2.2 percent and closing above the key psychological barrier at 3,000 points for the first time since Sept 17.
Gaining Shanghai A shares outnumbered losers by 869 to 33, while turnover climbed to 140 billion yuan ($20.51 billion) from Friday's 105 billion yuan.
The property sector was strong, with China Vanke gaining 6.84 percent to 12.34 yuan, while 10 other property companies raced up the 10 percent daily limit as analysts said real estate sales were upbeat following the week-long National Day holiday at the beginning of October.
"The situation with property sales is better than expected. The index has a chance to reach 3,100 to 3,200 points, backed by the economic recovery and solid earnings at listed firms," said Cao Xuefeng, senior analyst at Western Securities in Chengdu.
The index moved above its 60-day moving average, now at 3,037 points, for the first time in more than two months. Analysts said they would be looking for a more convincing break above the key technical level to indicate another move higher.
The market appeared little moved by long-awaited news that trade on the new ChiNext market for start-up shares would begin on Oct. 30. The formal launch had been widely expected this month.
Worries about supplies of new shares, including from initial public offerings on the main board and ChiNext, have weighed on the market in recent weeks.
Drugmakers were strong for a second day following news of a merger deal in the sector, which could boost earnings.
Shanghai Pharmaceutical, Shanghai Zhongxi Pharmaceutical and Shanghai Industrial Pharmaceutical Investment all jumped by the 10 percent daily limit for a second straight session after announcing a merger plan.
Jiangxi Copper jumped 7.43 percent to 41.20 yuan. (Editing by Chris Lewis)