HSBC leads HK shares up 3.8 pct;metals,property jump

* Metals surge on scuppered BHP-Rio deal

* Banks, exporters supported by Fed's $800 bln rescue plan

* Wharf up after Goldman Sachs adds it to conviction buy list

* Local property counters rally on Morgan Stanley upgrades

(Updates to close)

By Parvathy Ullatil

HONG KONG, Nov 26 (Reuters) - Hong Kong shares rose 3.8 percent on Wednesday, with HSBC (0005.HK: Quote, Profile, Research, Stock Buzz) and exporters rallying on the U.S. Federal Reserve's latest rescue plan, while metal producers surged after BHP Billiton scuppered its bid for rival Rio Tinto.

But turnover remained thin and price momentum stayed weak, suggesting the market's two-day rally may be short-lived.

"There are very few funds flowing in despite the big gains on the index, which means there is no stability yet. The market will likely drop tomorrow," said Linus Yip, strategist with First Shanghai Securities.

Shares in U.S-focused consumer goods exporter Li & Fung (0494.HK: Quote, Profile, Research, Stock Buzz) jumped 7.7 percent on the U.S. Federal Reserve's plan to spur consumer lending by buying up billions of dollars of debt and mortgage-backed securities.

Europe's top lender, HSBC Holdings, tracked gains in its Wall Street peers to climb 5.9 percent, while Standard Chartered (2888.HK: Quote, Profile, Research, Stock Buzz), which was hammered on Monday on its planned $2.69 billion rights issue, bounced back 10.5 percent.

"With the focus on the mortgage market this time, this rescue plan is expected to lift consumer lending and encourage spending. Export companies are all rallying today," said Kenny Tang, research head at Redford Securities.

The benchmark Hang Seng Index .HSI ended up 490.85 points at the day's high of 13,369.45.

Mainboard turnover edged up to HK$41.7 billion from HK$41.2 billion at midday on Tuesday.

The China Enterprises Index of top locally listed mainland Chinese firms .HSCE had gained 4.2 percent to 6,934.11.

More talk of interest rate reductions on the mainland sent China Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz) up 4.3 percent, while top lender ICBC (1398.HK: Quote, Profile, Research, Stock Buzz) gained 2.7 percent. Property developer R&F Guangzhou (2777.HK: Quote, Profile, Research, Stock Buzz) added 10.5 percent.

METALS SURGE

Aluminum Corp of China (2600.HK: Quote, Profile, Research, Stock Buzz) soared 8.5 percent on BHP Billiton's (BHP.AX: Quote, Profile, Research, Stock Buzz) dropped bid for rival Rio Tinto, a planned mega-merger which would have created a global mining giant.

The company's parent, Chinalco, said it planned to increase its holding in Rio (RIO.L: Quote, Profile, Research, Stock Buzz) (RIO.AX: Quote, Profile, Research, Stock Buzz) to at least 14.99 percent from the 12 percent it holds now [ID:nHKG83636].

"Chalco has nothing to do with BHP or Rio directly but the entire metals and mining pack is higher today after the threat of a BHP-Rio monopoly was removed," said Castor Pang, strategist with Sun Hung Kai Financial.

"The stock has dropped very sharply this year and investors are not expecting any more bad news from the company in the short term, helping a big rebound today."

Chinese steelmakers joined peers around the world in heaving a sigh of relief on the scuppered deal, which would have controlled a third of the world's seaborne trade in iron ore.

Angang Steel (0347.HK: Quote, Profile, Research, Stock Buzz) jumped 13.3 percent, while on the Shanghai bourse, Baoshan Iron & Steel (600019.SS: Quote, Profile, Research, Stock Buzz) bulked up 3.9 percent on the news, defying a mostly flat broad market.

Wharf Holdings (0004.HK: Quote, Profile, Research, Stock Buzz), a Hong Kong-based property conglomerate, rallied 12.9 percent after Goldman Sachs added the stock to its conviction buy list on its cheap valuations. The U.S. investment bank said further stimulus measures from China to revive its ailing property sector would help the stock.

Other property counters also gained, with Sun Hung Kai Properties (0016.HK: Quote, Profile, Research, Stock Buzz) vaulting 8.6 percent after Morgan Stanley upgraded it to equal weight from underweight follwing a 45 percent drop in the stock since mid-September. Sino Land (0083.HK: Quote, Profile, Research, Stock Buzz) which was raised to overweight from equal weight jumped 8.2 percent.

(Editing by Anne Marie Roantree)