* China erases earlier losses on stronger earnings
* Wynn Macau slips on downbeat outlook from parent
* Angang Steel declined on forecast for lower profit (Updates to close)
By Jun Ebias and Claire Zhang HONG KONG/SHANGHAI, Oct 28 (Reuters) - Hong Kong shares fell for a second straight session on Wednesday, as investors dumped Wynn Macau after its parent painted a gloomy outlook, while airlines moved higher on upbeat earnings.
In Shanghai, China's key stock index ended 0.33 percent higher in shrinking turnover, rebounding from the day's lows with coal and airline shares rising after strong earnings reports.
The benchmark Hang Seng Index fell 1.84 percent or 408.01 points to 21,761.58, its lowest level in more than a week. Turnover was HK$68.97 billion ($8.9 billion), versus Tuesday's HK$73.56 billion.
Analysts said the index would likely stabilise at 21,500 to 21,600 levels.
"We are quite near the short-term support level," said Alex Wong, a director at Ample Finance Group. "But a strong reversal on the upside is not likely because of the weakness of Chinese telecoms providers and the local property sector."
Weak overseas markets and concerns China may reverse its loose monetary policy also spurred some profit taking.
Wynn Macau tumbled 7.03 percent after its parent, Wynn Resorts, gave a downbeat outlook, causing its share price to drop 10 percent in the United States.
Angang Steel lost 5.82 percent after the company said late Tuesday that profit this year may fall by at least 50 percent as a result of lower steel prices.
Aluminum Corp of China was down 2.66 percent. The aluminium maker returned to profit in July-September after three quarterly losses, but its net profit of 21.27 million yuan ($3.11 million) in the third quarter was down 88 percent from a restated profit a year earlier.
China Shipping Container Lines fell 3.96 percent. The company posted a 1.94 billion yuan ($284.1 million) loss for the third quarter ended September.
ZTE Corp slumped 4.39 percent. China's No.2 telecommunications equipment maker posted a 58.2 percent rise in profit, beating a consensus forecast, as domestic providers build new 3G networks.
The China Enterprise Index of top locally listed mainland Chinese stocks fell 2.39 percent to 12,831.18.
Bucking the downward trend, mainland airlines gained after posting profits in the third quarter.
Air China rose 0.69 percent, after the mainland carrier's earnings returned to the black in the third quarter, with a boost from fuel-hedging gains and a strong rebound in domestic air travel. In Shanghai, Air China advanced 1.55 percent to 7.88 yuan.
China Southern Air advanced 1.67 percent.
Ping An Insurance declined 2.87 percent. The mainland insurer returned to a quarterly profit in July-September but warned that low interest rates and stock volatility could weigh on profit in the final quarter. Its Shanghai-traded shares dropped 2.22 percent to 57.66.
Hong Kong developers extended their decline on concern the government may impose more measures to curb a faster climb in property prices.
New World Development fell 4.33 percent, while Sino Land <0083.HK> was 4.64 percent lower.
The Hong Kong Monetary Authority on Friday said it would implement measures to slow a surge in luxury property prices, including capping mortgage loan values.
China Shenhua Energy shed 1.65 percent, even after reporting a 12 percent rise in profit. In Shanghai, China Shenhua, the world's most valuable coal producer, gained 0.98 percent to 35.13 yuan.
SHANGHAI FALLS
The Shanghai Composite Index closed at 3,031.329 points, rebounding after early weakness that extended the previous day's 2.8 percent fall.
Talk spread in financial markets that China's new bank lending may show a sharp drop in October to 200 billion yuan ($29.3 billion) from September's 517 billion yuan, but analysts said confidence remained strong in China's recovery.
The official China Securities Journal on Wednesday cited the Beijing-based Unirule Institute of Economics as saying that China's economy would grow 8.2 percent in 2009.
But worries that beijing may tighten its monetary policy as economic recovery gained momentum capped gains.
"The index faces increasing profit-taking pressure and seems to be having difficulty getting above 3,100 points, but solid earnings among blue chips offered support," said Qian Xiangjing, senior analyst at CITIC-Kington Securities in Hangzhou.
Gaining Shanghai A shares outnumbered losers by 627 to 306, while turnover shrank to 114 billion yuan from Tuesday's 139 billion yuan.
The market is also eyeing the pending start of trade this Friday on ChiNext, a Nasdaq-style second board for start-ups, where an initial 28 companies are to debut in the first batch. ($1=6.828 Yuan) (Editing by Chris Lewis)