* Chinese property stocks soar on strong May sales
* HK's Li & Fung falls on German retailer Arcandor's woes
* China financials jump in Shanghai on M&A possibilities
By Parvathy Ullatil & Claire Zhang
(Updates to close)
HONG KONG, June 8 (Reuters) - Hong Kong shares succumbed to profit-taking on Monday as investors digested mixed signals from the U.S. economy and held their breath for a raft of economic data from China and the United States this week.
But China-listed shares edged up, with financials helped by news of a possible tie-up between two heavyweights and property counters buoyed by strong sales in May.
"There has been a lot of uncertainty since the U.S. jobs data came out on Friday," said Andrew Sullivan, sales trader with MainFirst Securities in Hong Kong.
"The general lack of willingness to sell among investors has made things difficult for fund mangers who are looking to take profit. The U.S. data on Friday again didn't set a clear direction."
Data on Friday showed U.S. employers cut 345,000 jobs in May -- substantially less than analysts had forecast -- but the U.S. unemployment rate hit 9.4 percent, its highest since 1983.
Newsflow over the weekend rekindled worries over the financial strength of companies in recession-hit economies. Hong Kong based consumer goods supplier Li & Fung dropped 5.2 percent on uncertainity over the fate of a customer, German retailer Arcandor.
CHINA PROPERTY STOCKS CELEBRATE STRONG SALES
Property shares were strong, with China Vanke, the country's biggest-listed property developer, climbing 4.2 percent to 11.14 yuan after saying its May property sales rose 19.7 percent from a year earlier to 6.41 billion yuan ($937.5 million). The figure was up 22 percent from April's 5.27 billion yuan.
In Hong Kong, China Overseas Land bucked the trend in the broad market to rise 2 percent to HK$16.42 after the top Chinese property developer said its property sales in May soared 113.9 percent from a year earlier to HK$5.65 billion (US$724 million).
Smaller rival Greentown China piled on 3.6 percent to HK$10.30 after recording a 193 percent jump in May sales to 6.2 billion yuan from a year earlier. Greentown said the average contract selling price for the first five months rose 12 percent year on year to 11,251 yuan per square meter.
Hong Kong-based property developers sank on Monday after property transactions fell 77 percent from last week amid a lack of new launches, according to local newspaper reports. Top developer Sun Hung Kai Properties dropped 5.5 percent, to HK$95.40 while Li Ka-shing's property flagship Cheung Kong fell 3.8 percent.
The benchmark Hang Seng Index was down 2.3 percent at 18,253.39 led by a 2.7 percent drop in global lender HSBC as political uncertainty weighed down UK banks.
Turnover edged down to HK$73.7 billion from Friday's HK$80.4 billion.
The China Enterprises Index of top mainland companies retreated 1.8 percent to 10,667.88.
FINANCIALS STEP UP IN SHANGHAI
Chinese stocks rose 0.52 percent in shrinking turnover on Monday, with financials aided by news of a possible tie-up between Ping An Insurance and mid-sized lender Shenzhen Development Bank.
Analysts said a tie-up would be considered positive for both companies, with Ping An, which has a small banking unit, keen to build itself into a financial conglomerate.
Huatai Securities analyst Chen Jinren said a Ping An acquisition of a stake in Shenzhen Bank could boost the bank's shares sharply, while Chinese banks' overall share valuations were still attractive.
The Shanghai Composite Index ended up 14.445 points at 2,768.336, retreating from a 10-month intraday high of 2,795.149 hit during afternoon trade.
Losing Shanghai A shares outnumbered gainers, however, by 502 to 408, while turnover in Shanghai A shares shrank to one-week low of 138.7 billion yuan ($20.3 billion) from Friday's heavy 153.5 billion yuan.
China Merchants Bank rose 3.2 percent to 19.81 yuan, while China Construction Bank climbed 5.8 percent to 5.12 yuan. Hua Xia Bank gained 3.9 percent to close at 10.90 yuan.
Minsheng Bank Corp jumped 5.8 percent to 7.69 yuan after saying it planned to issue shares in Hong Kong. The official Shanghai Securities News said market estimates put the likely amount to be raised at about 20 billion yuan.
Analysts said supportive steps for industries, such as a rise in export tax rebates, lifted sentiment, although IPOs, which have been suspended for nearly nine months, could resume at any time after the end of a comment period on new rules last Friday, and this could spur profit-taking.
"The index is likely to edge up, since the worst period for the Chinese economy may be over," Chen added.
The Ministry of Finance on Monday said China was increasing value added tax rebates to exporters of more than 600 product lines. The news lifted a number of stocks, with Fujian Fynex Textile Science & Technology advancing by its 10 percent daily limit to 5.78 yuan.
(Reporting by Parvathy Ullatil in HONG KONG & Claire Zhang in SHANGHAI; Editing by Ed Klamann and Chris Lewis)