China support talk drives HK shares up 2.9 pct

* U.S. stock futures jump, sparking recovery in Asian markets

* HK stock recovery helped by talk of China rate cut

* Hefty gains in banks and properties after 4-day sell down

(Updates to close)

By Parvathy Ullatil

HONG KONG, Nov 21 (Reuters) - Hong Kong stocks rose 2.9 percent on Friday, as U.S. stock futures pointed to a recovery on Wall Street and talk swirled of another round of rate cuts in China, sending mainland lenders soaring.

But the main index finished the week 6.5 percent lower, its worst weekly performance in three weeks, on bleak economic data, job losses at top banks and the U.S. auto industry's woes.

"Plenty of rumours are doing the rounds today, but the one that got the market excited was about a 100 basis points cut in the reserve ratio at Chinese banks and 54 basis points cut in interest rates," said Sean Tsang, senior vice president with Polaris Securities.

China has cut the reserve requirement at its banks twice this year compared with three reductions in the lending rate since September.

"The government is also expected to increase the size of the stimulus plan, but the validity of and efficiency of such a plan remains questionable," he said, referring to the government's plan to pump 4 trillion yuan ($586 billion) into the economy to support growth.

China Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz), which had fallen 12.7 percent in the previous three sessions on talk that Bank of America may dilute some of its holding in the Chinese lender, jumped 6.1 percent. No.2 lender Bank of China (3988.HK: Quote, Profile, Research, Stock Buzz) climbed 5.9 percent.

The benchmark Hang Seng Index .HSI ended the session up 360.64 points at 12,659.20 after opening nearly 4 percent lower. The index, which has dropped 55 percent so far this year, had risen more than 6 percent earlier in the day, partly on hopes that a solution may be found to problems facing U.S. banking giant Citigroup (C.N: Quote, Profile, Research, Stock Buzz), which lost half its market value this week.

"There is a technical explanation for the rally, with the Dow Jones average .DJI having fallen more than 10 percent this week investors are hopeful about a recovery tonight and the stock futures are pointing in that direction," said Patrick Shum, strategist with Karl Thomson Securities.

The Dow Jones futures DJc1 were up 3.3 percent at 0830 GMT, sparking rebounds in other regional markets.

Turnover jumped to HK$50.4 billion ($6.5 billion) from HK$44.6 billion on Thursday. Average turnover this week, at around HK$43 billion, was the weakest in at least a year, said brokers, falling 23 percent from the third quarter average of over HK$61 billion.

Property counters, which were battered by a four-day sell-off in Hong Kong, roared back to life with strong gains. Hang Lung Properties (0101.HK: Quote, Profile, Research, Stock Buzz) jumped 8 percent, while Henderson Land (0012.HK: Quote, Profile, Research, Stock Buzz) rallied 4.5 percent.

The China Enterprises Index of top locally listed mainland Chinese firms .HSCE gained 3.8 percent to end at 6,424.97.

Heavy truck manufacturer Sinotruk (Hong Kong) (3808.HK: Quote, Profile, Research, Stock Buzz) soared 8.2 percent after it said it was in preliminary talks with a third party on a possible long-term partnership deal, which might eventually bring in an important strategic investor.

Cement makers notched up strong gains, as some investors resumed buying on hopes that China's $586 billion stimulus plan will boost the construction sector, propping up demand for the building material.

China National Building Materials (3323.HK: Quote, Profile, Research, Stock Buzz) rallied 23.7 percent, while Shanshui Cement (0691.HK: Quote, Profile, Research, Stock Buzz) shot up 8.6 percent.

Aid package hopes also fuelled a 15 percent rally in Maanshan Iron & Steel (0323.HK: Quote, Profile, Research, Stock Buzz) and a 9 percent jump in Angang Steel (0347.HK: Quote, Profile, Research, Stock Buzz).

(Editing by Anne Marie Roantree)