Hong Kong shares rise off two-week low, China tepid

* HSI +0.4 pct; CSI300 flat, Shanghai -0.2 pct

* HSI set for Oct gain, CSI300, Shanghai to post monthly loss

* ``Big Four'' China banks buoyed by ICBC Q3 earnings beat

* China coal plays up on report of pricing reform

HONG KONG, Oct 31 (Reuters) - Hong Kong shares bounced off a near two-week low, buoyed by strength in Chinese banks after the largest, Industrial and Commercial Bank of China (ICBC), posted third-quarter earnings that beat expectations.

The Hang Seng Index went into Wednesday's midday trading break up 0.4 percent, with gains limited at around 21,560, a level that had capped moves on the benchmark in four of the previous eight sessions. The index is now up 3.3 percent in October, set for a second-straight monthly gain.

``International fund managers are increasing their allocation to this part of the world, but there is little reason for investors to come into the market now,'' said Hong Hao, chief strategist with Bank of Communications International Securities.

``We just hit new 2012 highs last week, but earnings haven't been fantastic, so we need new catalysts to breach the stiff chart resistance,'' Hong added.

In the mainland, the CSI300 Index of the top Shanghai and Shenzhen listings was flat, while the Shanghai Composite Index slipped 0.2 percent. They are down 2.3 percent and 1.4 percent on the month.

All three indices were hurt on Wednesday by falls for Petrochina , which slid 3.3 percent in Hong Kong and 0.7 percent in Shanghai, after the Chinese oil giant saw third-quarter profit tumble 33 percent, a bigger drop than expected.

Conversely, ICBC rose 1.2 percent in Hong Kong after posting late on Tuesday a better-than-expected 15 percent rise in quarterly net profit as interest margins widened due to increased demand for credit.

The other ``Big Four'' Chinese banks were also stronger. China Construction Bank (CCB) jumped 1.6 percent, Bank of China (BOC) gained 1 percent, while Agricultural Bank of China (AgBank) firmed 1.2 percent.

Bourse operator Hong Kong Exchange (HKEx) rose 1.1 percent on anticipation of more capital inflows after the city's monetary authority intervened for the fifth time in less than two weeks to defend its currency peg by weakening the Hong Kong dollar.


The Chinese railway sector were also buoyed by a spate of positive third-quarter corporate earnings. China Railway Construction rose 4.7 percent in Hong Kong and 1.5 percent in Shanghai after posting a 41 percent increase in third-quarter net profit.

China Railway Group jumped 5.7 percent in Hong Kong and 2.7 percent in Shanghai after reporting a 65 percent rise in third-quarter net profit.

Coal plays were boosted by a state-run Shanghai Securities News report that the country's top economic planning agency is studying ways to allow the market to determine thermal coal prices.

China Shenhua Energy Co Ltd, the country's largest coal producer, rose 1.6 percent in Hong Kong and 0.7 percent in Shanghai.