* Shanghai rises 0.8 pct; Hong Kong slips 0.13 pct
* Sentiment remains fragile on China's rate rise concerns
* HK developers fall as gov't prepares fresh property curbs (Updates to close)
By Jun Ebias and Farah Master
HONG KONG, Nov 19 (Reuters) - Chinese shares rebounded in afternoon trade on Friday, helping the Hong Kong market recoup most of its losses, on hopes that further interest rate rises in China would not be as aggressive as earlier feared.
But Hong Kong's Hang Seng index still ended slightly lower, weighed down by speculation that the city's government would announce fresh measures to curb soaring property prices.
After the market close, the government said it would raise stamp duty on some transactions and take other measures to clamp down on property speculation. For the latest story, see .
Stocks in Shanghai and Hong Kong had retreated earlier in the week on worries that Beijing would tighten policy quickly in coming months after inflation accelerated to a 25-month high.
But market watchers said on Friday the selloff may have been overdone, noting that global markets had already been vulnerable to a pullback after a strong rally since late summer had left them looking oversold.
"Rate hikes are going through without any doubt, but the increases will not be as drastic as earlier feared," said Alfred Chan, chief dealer at Cheer Pearl Investment. "Probably it will be 25 bps each time."
The Shanghai Composite Index closed up 0.8 percent at 2,888.6 points, hovering just below the 250-day moving average, after gaining 0.9 percent on Thursday. The index still lost about 3 percent over the week, extending a sharp fall since last Friday.
The index darted up in the last half an hour of trade, after falling close to 2 percent in the morning session.
"The main factor was worries that there will be an interest rate rise this weekend. Sectors like banks, property, those that will be most affected, have fared the worst today," said Wen Lijun, analyst at Nanjing Securities.
Banks were among the most active shares, with Everbright Bank down 1.3 percent, Merchants Bank 0.9 percent lower and Pudong Development Bank off 0.5 percent.
Property issues also dipped with Vanke , the country's top developer, down 0.4 percent and real estate firm Jiangxi Zhong Jiang Real Estate falling 2.2 percent.
SAIC Motor Corp gained 1.2 percent after the Chinese automaker said on Thursday that it had bought a near 1 percent stake in General Motors Co , as part of the U.S. automaker's IPO. [ID:nTOE6AH06E]
Shanghai shares have had a rollercoaster year, dropping nearly 30 percent by early July after a clampdowns on bank lending and official measures to curtail the country's real estate fever.
But investor sentiment rebounded in October with the index jumping some 12 percent on the month on hopes of more capital flows entering the domestic market.
Volume rose on Friday but remained far below highs seen in October's liquidity fueled rally. Turnover of Shanghai A shares edged up to 155 billion yuan ($23.36 billion) from 127 billion yuan.
HONG KONG ENDS FLAT BUT DEVELOPERS DOWN
In Hong Kong, local developers fell on speculation that the government was about to unveil more measures to cool red-hot property prices, which have been fueled in part by wealthy mainland Chinese pumping money into the city.
The Hang Seng Index ended down 0.13 percent at 23,605.71, after falling 1.5 percent by midday. For the week, the index shed 2.5 percent.
The property subindex fell 1.3 percent on the day. New World Development lost 2.5 percent and Henderson Land fell 1.8 percent.
Turnover in Hong Kong hit HK$97 billion ($12.5 billion), below the HK$103.4 billion average in the last 30 days.
Dealers said Hong Kong shares could rebound next week even if China announces a rate rise in coming days, as long as it is a modest one.
"We will have a correction next week once the uncertainty about China's rate increase has been cleared," said Louis Wong, research head at Philip Securities. "If not, there will be an overhang and we will continue to see a volatile market."
Banking shares also pulled the Hang Seng lower.
Industrial and Commercial Bank of China lost 1.7 percent and smaller rival China Construction Bank dropped 1 percent.
Bucking the trend, Chinese PC maker Lenovo Group Ltd gained 3.6 percent, lifted by an upbeat earnings forecast from rival Dell Inc . [ID:nN18114219]
Chinese car makers Great Wall Motor gained 5.3 percent and Dongfeng Group was up 0.9 percent, after Beijing released the list of firms that were eligible for government subsidies that included the two companies, analysts said.
(Editing by Kim Coghill)
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