* HK shares finish near 11-month closing high
* China Mobile soars on A-share listing talk
* China shares drop for 2nd day led by financials
By Parvathy Ullatil and Claire Zhang (Updates to close)
HONG KONG/SHANGHAI, Aug 6 (Reuters) - Hong Kong shares jumped 2 percent on Thursday to end at an 11-month closing high as early losses were erased by strong buying in China Mobile on speculation the company was on track to list in Shanghai.
But in China, shares dropped for a second straight day on worries about adjustments to monetary policy that might impact market liquidity.
An increase in share supply as Shanghai moves forward with a long-awaited plan to allow listings by foreign companies also cast an overhang on the market, analysts in Shanghai said.
Shanghai Vice-Mayor Tu Guangshao said in a speech this week that foreign companies would be able to list on an international section of the exchange next year, domestic media reported.
His comments coincided with news that HSBC Holdings could raise 50 billion yuan ($7.32 billion) in a Shanghai listing next year as it vies to be one of the first foreign companies traded on the mainland.
HSBC rose 3.3 percent in Hong Kong, extending gains to nearly 10 percent since its first-half earnings on Monday. Europe's biggest bank has hired China International Capital Corp (CICC) and Citic Securities Co to help arrange an initial public offering in Shanghai, Reuters reported on Tuesday.
CHINA TELCOS ON A ROLL IN HK
China Mobile soared 7.5 percent to end at an 11-month closing high of HK$87.10 as investors snapped up the laggard stock, partly on market talk that that the world's largest wireless carrier may list on the mainland Chinese A-share market by the end of this year.
"The A-share market will go crazy for this stock," said Francis Lun, general manager with Fulbright Securities.
The index heavyweight has risen 12 percent so far this year, underperforming the 45 percent rally on the main index.
Other Chinese telecom stocks also surged. China Unicom piled on 7.9 percent and China Telecom vaulted 6.4 percent.
The benchmark Hang Seng Index finished up 2 percent or 404.47 points at 20,899.24, its highest close since September 2008.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, underperformed to rise 0.7 percent to 12,052.60 as top lender ICBC gave up 1.3 percent.
"Lower loan growth at banks and a tightening of lending to the property sector are the biggest concerns," said Steven Leung, sales director with UOB Kay Hian.
The world's No.4 PC brand Lenovo finished 5.2 percent higher after the company reported a smaller-than-expected first-quarter loss. The stock dropped as much as 6.8 percent during morning trading as investors locked in gains on the more than 50 percent rally in the stock in the three weeks to Tuesday.
FINANCIALS UNDER PRESSURE IN SHANGHAI
Stocks in Shanghai fell 2.1 percent on Thursday, led by large cap shares but property shares rebounded to lift the index off lows.
The Shanghai Composite Index ended down 72.171 points at 3,356.330, a one-week closing low, and was down for a second day after a four-day rally stalled near the psychologically key mark of 3,500 points.
China's central bank said late on Wednesday in its monetary policy report for the second quarter that it would deploy a variety of tools to tweak monetary policy.
"The market may have overreacted to the central bank's quarterly report ... But the overreaction has strong reasons behind it," said Qian Qimin, deputy research head at Shenyin & Wanguo Securities.
"The authorities, in particular the China Banking Regulatory Commission, have really tightened supervision of bank money with the aim of preventing it from flowing into the bubbling stock and property markets. This will hinder the flow of liquidity into the stock market."
Losing Shanghai A shares outnumbered gainers by 714 to 217, while turnover for Shanghai A shares dropped to 216.3 billion yuan ($31.7 billion) from Wednesday's 240.3 billion yuan.
Many analysts noted an article in the official People's Daily saying that risks had increased of an asset bubble after the index reached 3,400 points, and although economic recovery would support the market a correction could occur at any time.
Analysts said the index may initially dip to test the 30-day moving average, now at 3,214 points, while Li said that at this stage it would not fall below the bottom of a gap formed on the charts in mid-July at 3,147 points.
Financials were weak, with Industrial & Commercial Bank of China, the country's biggest lender, dropping 1.2 percent to 5.17 yuan.
But property shares rebounded with developer China Vanke rising 1.1 percent to 13.29 yuan.
Sector leaders among resource shares declined, with Baoshan Steel dropping 4.9 percent to 9.08 yuan, China Shenhua Energy down 4.2 percent at 38.52 yuan, and Jiangxi Copper down 4.6 percent at 44.48 yuan. (Editing by Edmund Klamann and Chris Lewis)