* China shares at two-month low in second big drop this week
* HK shares at one-month closing low; turnover slows
* Recently listed shares in China slide (Updates to close)
By Parvathy Ullatil & Claire Zhang
HONG KONG, Aug 19 (Reuters) - China shares slid 4.3 percent on Wednesday, led by recently listed shares, as nervous investors bailed out on worries the 20 percent slide in just two weeks would continue to deepen, shrugging off official efforts to talk up the market.
Taking a cue from a second steep drop on the Shanghai bourse this week, Hong Kong shares shed 1.7 percent to finish at a one month closing low as concern about slowing fund inflows built up.
Wednesday's slide did not stem from worries of a possible severe slowing of China's economic recovery or a change in China's relatively loose monetary policy, said analysts.
Policy worries have recently made the Shanghai slide a focus of global markets with Wednesday's losses triggering a similar reaction in markets across the rest of Asia and Europe.
While a 20-percent fall is typically regarded as the watershed for a bear market by global standards, Chinese investors are focusing instead on the next key level of support at the 125-day morving average or the half-year moving average, now at 2,703 points, as a potential bear market signal.
The index has held above that moving average since early February.
"Investors are disappointed that regulators failed to take any concrete steps to support the market, while sentiment is extremely shaky after the market's tumble over the past two weeks," said analyst Chen Huiqin at Huatai Securities in Nanjing.
CHINA BANKS DROP AHEAD OF EARNINGS
The benchmark Hang Seng Index finished down 352.04 points at 19,954.23, while turnover shrank to HK$64.4 billion from Tuesday's HK471.5 billion.
"There are any number of rumours and reasons for why the China markets have been falling. But ultimately those are all excuses for investors to take profit on the big rally this year," said Peter Lai, director with DBS Vickers.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was down 1.6 percent at 11,260.83.
Bank of Communications, which kicked off the earnings season for mainland banks on Wednesday, was down 1.2 percent. China's fifth-largest lender reported a flat first-half profit after the market closed on Wednesday.
Chinese banks boosted lending at a record pace in the first half of the year but are set to report lower first-half earnings on compressed interest margins.
The world's second-largest lender, China Construction Bank, fell 1.9 percent, while Bank of China was down 2.1 percent.
Europe-focused fashion brand Esprit Holdings was among the only two gainers on the main index, rising 1.9 percent after data showed German investor sentiment hit its highest level in more than three years in August, stoking hopes for a recovery in Europe's largest economy.
The German market accounts for nearly half of Esprit's total sales.
Maanshan Iron & Steel slid 5.8 percent after posting a loss for the first half of 2009, against a profit a year earlier, as sales volume and prices of steel products fell on declining demand amid the economic crisis.
The steelmaker said domestic steel product prices looked uncertain in the second half, despite expected growth in demand.
NEW LISTINGS SOLD DOWN
The Shanghai Composite Index fell 125.3 points to 2,785.584, its lowest close in two months. Turnover for Shanghai A shares rose to 121.9 billion yuan ($17.84 billion) from Tuesday's 117.4 billion yuan, while losing Shanghai A shares outnumbered gainers by 822 to 126.
"The market is faced with heavy pressure from new share issues, among other things, and the index appears not to have found a floor yet," said Central Securities analyst Zhang Gang. "We may see some technical bounces from time to time in the near future, but they should be mild for now."
China's three most influential official securities newspapers published bullish comments on Wednesday and sought to talk up the market, but analysts said investors had been hoping for action from the authorities.
Analysts said it was not unusual in the 18-year history of China's stock market for state media to try to talk up the market before regulators came forward with market-boosting steps.
Born from the fund-raising needs of China's stated-owned companies, China's stock market has typically been rescued by the government in times of sudden and severe weakness, and investors have grown accustomed to this intervention.
China Everbright Securities, which made its listing debut in Shanghai on Tuesday with a 30 percent rise, plunged its 10 percent daily limit to close at 24.66 yuan.
China State Construction Engineering Corp, which listed late last month after the world's biggest initial public offering (IPO) in a year, dropped 7.4 percent to end at 5.29 yuan, the day's most active stock.
Some analysts said the sell-off of newly listed IPOs threw down the gauntlet to regulators who had picked up the pace of approving new listings, after the government launched a drive in June to allow companies to go public to improve China's economic and corporate structure. (Editing by Edmund Klamann and Chris Lewis)