* Hong Kong shares fall 2.32 pct on weak U.S. economic data
* Glorious Property makes lacklustre market debut
* DBS Vickers forecastst market correction in Q4 (Updates to midday)
By Sui-Lee Wee
HONG KONG/SHANGHAI, Oct 2 (Reuters) - Hong Kong stocks began the fourth quarter on a dismal note, with shares hitting a three-week low on Friday as disappointing U.S. manufacturing and jobless claims data cast further doubt on the strength of economic recovery.
The benchmark index fell 2.32 percent or 485.96 points to 20,469.29, heading for its biggest one-day percentage fall since Sept. 24.
Turnover was HK$31.9 billion ($4.12 billion), compared with Wednesday's HK$24.4 billion ($3.15 billion).
"The figures from the U.S. were not so good and that triggered some form of profit-taking," said Peter Lai, a director at DBS Vickers.
Banks led losses, with HSBC down 3.11 percent, Industrial and Commercial Bank of China down 1.88 percent, and China Construction Bank down 1.78 percent.
Hong Kong's benchmark index touched a one-year high on Sept.17, but the rally has stalled since then on concerns of steep valuations and the global economic outlook.
In the U.S., the Institute for Supply Management's index of national factory activity declined in September from August's reading, and although the latest reading still indicated growth, it was sharply below economists' forecast in a Reuters poll.
Data on jobless claims also was worse than expected.
For the third quarter, Hong Kong's benchmark index rose 12 percent, but brokers warned that the trend was not sustainable. "This is not a bull market," Lai said. "I don't believe it's the right time for long-term investments.
"We expect, in the fourth quarter, some correction," he said. "Governments have been printing money and it's this liquidity that's driving the market. When they retreat their stimulus packages, that will create a big problem."
Lai said the index could fall to 18,000 in the fourth quarter.
IPO STUTTERS
The China Enterprises Index of top locally listed mainland Chinese stocks was down 2.22 percent at 11,595.23.
Chinese property developer Glorious Property Holdings fell 20 percent in its debut on Friday, dented by a Wall Street sell-off and a dwindling appetite for newly-listed stocks amid a flurry of new offerings. By the midday break it stood at HK$3.79.
Energy shares fell after crude prices fell towards $70 per barrel on Friday. PetroChina slipped 1.83 percent, Sinopec Corp. shed 2.58 percent and CNOOC was down 0.96 percent.
Heritage International, which invests in property and securities, fell 12.73 percent after the company said it aimed to raise HK$154.4 million in a stock placement to boost its capital. The stock was among the top percentage losers in Hong Kong.
Toy company RBI Holdings bucked the market weakness and more than tripled after it said it would acquire Apollo Precision, a maker of silicon-based thin film photovoltaic modules, for HK$4.18 billion ($539.4 million), as it aims to cash in on growing demand for solar energy in China. The stock was the top percentage gainer in Hong Kong, up 216.15 percent at HK$4.10.
China's stock market is closed from Oct. 1 to 8 for the National Day holiday. Trading will resume on Oct. 9. (Editing by Chris Lewis)