* China banks help HSI off early lows; energy stocks drag
* Ping An drops in HK for 3rd day; edges up in Shanghai
* China property stocks rise on signs of improving sales (Updates to close)
By Parvathy Ullatil & Claire Zhang
HONG KONG/SHANGHAI, June 17 (Reuters) - Chinese stocks rose 1.23 percent in light turnover on Wednesday, led by a surge in property shares, with China Vanke jumping nearly its 10 percent daily limit on signs of strong real estate sales.
Hong Kong shares finished lower for third straight day on Wednesday as resources-linked stocks weighed, but the main index bounced off early lows led by a late rally in Chinese banks.
CHINA BANKS EASE SLUMP
The benchmark Hang Seng Index was down 80.90 points or 0.5 percent at 18,084.60. The index fell to 17,833.77 during the morning session.
"Despite the nearly 1,000 point correction so far this week, it's pretty clear the selling pressure is still not very high. But what is noticeable is that we are losing momentum because of the strength in the dollar and U.S. rate concerns," said First Shanghai Securities strategist Linus Yip.
China Construction Bank rose 1.3 percent to HK$5.69, while top lender ICBC advanced 2.1 percent to HK$5.32 as investors chased up stocks that have lagged the recent rally.
The China Enterprises Index of top mainland companies slipped 16.17 points or 0.2 percent to 10,700.15.
Dongfeng Motor Group vaulted 11 percent after reporting a $124.6 million profit for the first quarter of 2009.
Turnover dropped to HK$74.5 billion from Tuesday's HK$76.5 billion.
Commodity stocks, battered by weak oil and metals prices on Tuesday, fell further in another rocky session even as crude oil inched up to $71 per barrel on a weaker U.S. dollar.
Asia's largest energy producer PetroChina fell 1.3 percent to HK$8.65, while offshore oil producer CNOOC, which was the biggest drag on the main index, dropped 2 percent.
China Resources Gas tumbled 8.5 percent to HK$5.36 after Credit Suisse and Morgan Stanley sold down a combined 11.7 percent stake in the company at HK$4.6 per share, which represents a 21.5 percent discount to Tuesday's closing price.
Link REIT jumped 3.2 percent after reporting a 13.5 percent increase in its total distributable income for the year ended March 2009.
Ping An slid 2.3 percent to HK$53, falling for a third straight day after announcing a deal to increase its stake in mid-sized lender Shenzhen Development Bank to up to 30 percent.
The stock has given up more than 10 percent, or $2 billion, in market value this week as analysts deemed the deal expensive and cut their rating on China's second-largest insurer.
In Shanghai, Ping An edged up 0.36 percent to 44.01 yuan, stabilising after dropping 4.9 percent on Tuesday, while Shenzhen Development Bank lost 1.73 percent to 22.20 yuan, giving back part of a 13 percent gain in the previous two sessions.
CHINA PROPERTY STOCKS SHINE
The Shanghai Composite Index ended up 34.101 points at 2,810.123, its highest close in a week and near a 10-month closing high of 2,816.247 hit last week.
Gaining Shanghai A shares outnumbered losers by 712 to 204, while turnover in Shanghai A shares rose to 117.6 billion yuan ($17.21 billion) from Tuesday's 107.9 billion yuan.
Vanke climbed 9.7 percent to 11.88 yuan after the official China Securities Journal quoted Vanke Board Secretary Tan Huajie as saying that the proportion of real estate purchased for investment purposes rather than for individual use had risen.
Advisers CB Richard Ellis on Tuesday said Chinese property prices would stabilise over the rest of 2009, supported by government stimulus measures.
Analysts added that stronger-than-expected property sales were lifting the sector and the index now appeared likely to touch a new high for the year in the short term.
"Demand and sales in the property sector both seem strong, encouraging money to pour into the sector's shares," said Haitong Securities analyst Zhang Qi.
Several health product stocks gained as the H1N1 flu virus spread. Guilin Layn Natural Ingredients, a health food products maker, surged by its 10 percent daily limit to 31.85 yuan as the number of confirmed H1N1 flu cases in China climbed to 226 as of Monday. The company's share price has surged by more than 2-½ times in less than two months. (Reporting by Parvathy Ullatil in HONG KONG and Claire Zhang in SHANGHAI; Editing by Edmund Klamann and Chris Lewis)