(Updates to midday)
HONG KONG/SHANGHAI, June 23 (Reuters) - Hong Kong shares retreated 3.2 percent on Tuesday in a broad-based slump spurred by lower energy and metals prices and a steep drop on Wall Street overnight over doubts about the pace of economic recovery.
China stocks fell 1.4 percent, mildly outperforming other Asian markets, pulling back after scaling an 11-month closing high in the previous session.
The premium gap between yuan-denominated A-shares and their Hong Kong-listed H-share counterparts rose above 42 percent for the first time in over two months.
Here are the index moves and top stock moves by midday-
HONG KONG
* The benchmark Hang Seng Index was 3.2 percent lower at 17,489.25 with all but one stock languishing in the red.
* "The three-month rally we've had was quite a long one and now we are headed for a 1-½ month correction. The trend is likely to be W-shaped as funds move in and out of risky assets," said KGI Aisa chief operating officer Ben Kwong.
* Scandal-tainted Chinese electronics retailer GOME was up 76.8 percent as it emerged out of a seven-month trading suspension after announcing a major capital raising move and signed on U.S. private equity firm Bain Capital as a new investor.
GOME shares soared to HK$2.32 but later trimmed gains to settle at HK$1.98 by midday. Merrill Lynch upgraded GOME to "buy" from "underperform", saying the "worst was over and short-term risk was under control".
* Turnover rose to HK$38.2 billion from midday Monday's HK$37.1 billion.
* The China Enterprises Index, which represents top locally listed mainland Chinese stocks, had fallen 3.8 percent to 10,235.39.
* Manulife Financial extended Monday's losses to a one-month
low after the Canadian insurer received an enforcement notice
from the Ontario Securities Commission that found the company had
failed to meet certain disclosure obligations. The stock was down
9.3 percent at HK$142.30, while its Toronto-listed scrip
* Asia's largest oil & gas refiner PetroChina slid 4.3 percent after crude oil extended its decline toward $67 per barrel on Tuesday from a drop of more than $2 a day earlier. Offshore oil specialist CNOOC shed 4.3 percent, while Asia's top refiner Sinopec Corp fell 3.3 percent.
* Other commodity stock were also battered, with the world's No.3 alumina producer Aluminum Corp of China dropping 7.2 percent, while coal miner China Coal Energy shrank 5.1 percent.
* GCL-Poly Energy <3800.HK>, an independent power cogeneration plant operator in China, jumped 18 percent to HK$2.95 after agreeing to buy a Jiangsu-based polysilicon and wafer maker for $3.38 billion. The stock hit a 1-½ year high earlier in the session.
The deal will be settled by $200 million in cash, an issue of notes worth $350 million and an issue of new shares at HK$2.2 each, a 12 percent discount to the last closing price of HK$2.50 on June 3, prior to its trading suspension.
SHANGHAI
* The Shanghai Composite Index ended the morning down 1.4 percent at 2,855.772.
* Losing Shanghai A shares outnumbered gainers by 675 to 235, while turnover in Shanghai A shares slipped to 69.8 billion yuan ($10.2 billion) from Monday morning's 81.1 billion yuan.
* "Weak overseas market triggered profit-taking. The index, which just hit a new high (for this year), is likely to consolidate," said Western Securities analyst Cao Xuefeng.
* The consolidation comes after a rapid rise, and the index is expected to find short-term support at its 14-day moving average of 2,807 points.
* Su Ning, a vice-governor of the People's Bank of China, on Tuesday said the Chinese economy was headed in the right direction, but the foundation of the recovery was not yet solid.
* Financial shares were weak after leading Monday's gains. CITIC Securities sank 3.67 percent to 28.09 yuan after sayingthe National Audit Office had found violations in related operations including the company itself and its parent. CITIC said the investigation would not affect earnings.
* Coal shares fell after Inner Mongolia, China's second-largest coal producing province in 2008, became the seventh regional government to set up a coal price adjustment fund starting July 1.
Huolinhe Opencut Coal Industry of Inner Mongolia lost 2.74 percent to 24.49 yuan after saying the new rule would have a major impact on its earnings. It posted a 720 million yuan ($105.3 million) net profit in 2008 and expects net profit to decrease by 800 million-140 million yuan in 2009.
* The most heavily weighted stock in the index, PetroChina dropped 2.81 percent to 13.84 yuan after oil fell below $67 per barrel on Tuesday. (Reporting by Parvathy Ullatil & Claire Zhang; Editing by Chris Lewis)