(Updates to midday)
HONG KONG/SHANGHAI, July 28 (Reuters) - Hong Kong shares rose 0.7 percent in volatile trade as investors continued to pile into property stocks and index laggards, but China stocks snapped a four-day rally after regulators warned against the improper use of bank loans.
Steel stocks jumped to rank among the biggest gainers in both markets after Goldman Sachs raised its view on the sector to "attractive" as its sees increased demand for the metal in the third quarter when new infrastructure projects kick off.
Angang Steel gained 6.3 percent to HK$16.60 after the investment house upgraded the stock to buy from neutral with a new target price of HK$20. Baoshan Steel led gainers on the Shanghai Index with a 5.4 percent rally at 9.12 yuan, with more than 198 million shares changing hands after Goldman Sachs raised its rating on the stock to buy with a target price of 13 yuan.
Here are the index and top stock moves in both markets by midday-
HONG KONG
* The benchmark Hang Seng Index advanced 141.09 points to 20,392.71 with a turnover of HK$42.3 billion ($5.46 billion). The index vacillated between a 10-month high of 20,442.91 and a low of 20,109.55.
* "Retreating from the market now looks a dilemma as bullish sentiment continues to grow while valuations have gone well ahead of the expected improvements in economic activity and corporate earnings," said Marco Mak, analyst with Taifook Securities.
* Analysts see the broad market cooling down after cement maker BBMG Corp makes its debut on Wednesday after its $768 million share sale was oversubscribed in large numbers.
* Property stocks extended gains with New World Development up 3.5 percent and Hang Lung Properties gaining 1.7 percent. New residential lending in the territory soared to its highest on record in June, according to the Hong Kong Monetary Authority, amid low interest rates and new launches.
* The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was 0.9 percent higher at 12,300.40.
* China Mobile built on Monday's sharp gains to rise another 2.2 percent while China Unicom climbed 1.9 percent on a report that China's No.2 wireless service provider had reached an agreement with Apple Inc. (AAPL.O) to be the sole supplier of the iPhone in China for three years.
Unicom will guarantee total iPhone sales of at least 5 billion yuan ($732 million) and could begin selling the handsets in September, the Shanghai Securities News reported Tuesday, citing unnamed sources.
* Garment retailer Bossini International Holdings soared 39.4 percent after the company said its controlling shareholder Law Ka Sing was in talks to sell his 68.58 percent stake in the company to a potential investor.
SHANGHAI
* Chinese stocks fell 0.34 percent on Tuesday, snapping a four-day winning streak, after regulators warned against the use of loans for property and stock market speculation, but analysts said the long-term upward trend remained intact.
* The Shanghai Composite Index ended the morning at 3,423.639 points, after hitting a low of 3,392.428 points.
* Falling Shanghai A shares edged out gaining stocks by 471 to 406. Turnover in Shanghai A shares rose to 130 billion yuan ($19 billion) from Monday morning's 119.5 billion yuan.
* The China Banking Regulatory Commission warned late on Monday that Chinese banks must ensure that loans they issue for investment projects are actually put to use in the real economy, amid concern that money was flowing into the property and stock markets for speculation.
* "Investors are using this as an excuse to take profits after rapid gains," said Gao Lingzhi, strategist at Great Wall Securities Co. "The market will continue to trend upward, as long as investors see fresh signs of a solid economic recovery ... The only concern is that the government may start to tighten monetary policy, which could affect market liquidity. But such a move is unlikely soon."
* Premier Wen Jiaobao reaffirmed that China would maintain its current macroeconomic policies to safeguard stable and fairly fast economic growth during a trip to Jilin province, the People's Daily reported on Tuesday.
* Consumer prices are beginning to stabilise and inflation could bottom out at the end of the third quarter before rebounding, the central bank said in a report on Tuesday. The report added that China's growth recovery in the second quarter had been stronger than expected, hitting 14.9 percent on an annualised, seasonally adjusted basis.
* Property developers fell on concern that the government may take measures to curb speculation. China Merchants Property, a major developer in Shenzhen, dropped 3.40 percent to 34.68 yuan, while sector leader China Vanke dropped 0.56 percent to 14.09 yuan.
* Banks were down after regulators said some lenders were lax in risk management. China Minsheng Banking Corp, the country's first privately run lender, dropped 1.71 percent to 8.6 yuan.
* Shares in Sichuan Expressway Co Ltd tumbled their 10 percent daily limit to 9.81 yuan, as investors rushed to take profits a day after an explosive speculative rally in their mainland debut.
(Reporting by Parvathy Ullatil in HONG KONG and Samuel Shen in SHANGHAI; Editing by Edmund Klamann and Jonathan Hopfner)