* HSI up 0.68 percent as Chinese banks rebound
* China Mobile falls on concern over possible Vodafone sale
* Shanghai higher, Hainan-linked stocks shine (Updates to close)
By Donny Kwok and Farah Master
HONG KONG/SHANGHAI, Aug 30 (Reuters) - Hong Kong and Shanghai stocks rose on Monday, with the Hang Seng Index posted its biggest single-day percentage gain in four weeks as Chinese banks rebounded, tracking stronger overseas and mainland markets.
The Hang Seng Index ended up 0.68 percent or 139.87 points at 20,737.22, ending six straight sessions of losses. However, analysts see downside pressure as earnings excitement fades.
The China Enterprise Index was up 1.2 percent at 11,531.72.
"It was a technical rebound in cautious trade, but the market is expected to head south as excitement from strong corporate earnings fades," said Linus Yip, strategist at First Shanghai Securities.
Turnover totalled HK$49.25 billion ($6.3 billion), the lowest since Aug. 23y.
Castor Pang, research director at Cinda International, said the blue chip index could test a downside below 20,500 in the immediate term because of U.S. economic uncertainty.
"It could retreat below 20,000 in September or early October, especially since the U.S. economy won't be able to recover even if (U.S. Fed Chairman Ben) Bernanke tries to ease investors' concerns," Pang said.
Short-covering helped boost Chinese banks with Industrial and Commercial Bank of China Ltd up 2 percent and Bank of China Ltd gained 1 percent.
Agricultural Bank of China Ltd fell 2 percent after the country's third-biggest lender reported on Friday a 40 percent rise on first-half profit to 45.8 billion yuan, slightly below the average forecast of 47.1 billion yuan.. Agbank said on Monday that full-year profit could exceed forecasts.
China Mobile Ltd fell 1.2 percent on concern that Vodafone Group Plc may sell assets including its 3.2 percent holding in the mobile operator, as the world's largest telecom operator by revenue started to retreat from sprawling international expansion..
China Shenhua Energy Co Ltd rose 1.8 percent after it posted a record second-quarter profit on higher sales. Dongfeng Motor Group Co Ltd climbed 5.3 percent to its highest since April 22 after it said first-half net profit more than doubled.
SJM Holdings Ltd, Macau's largest casino operator controlled by gambling tycoon Stanley Ho, advanced 4.3 percent ahead of the release of second-quarter earnings later on Monday.
SHANGHAI HIGHER
China's key stock index ended up 1.61 percent on Monday, its biggest daily percentage gain in two weeks, spurred by stronger overseas markets, while stocks linked to Hainan island outperformed because of a plan to promote it as an international holiday destination.
The Shanghai Composite Index finished at 2,652.664. Analysts said the index, which lost 1.2 percent last week, would trade narrowly around 2,600 points this week with concern about economic growth and property controls still in focus.
Federal Reserve Chairman Ben Bernanke told central bankers at a conference in Jackson Hole, Wyoming that the Fed was ready to take further steps if needed to spur recovery.
"Today's gains were mostly triggered by large gains in global markets," said Guo Yanling, analyst at Shanghai Securities. "Government policies for certain sectors and strong earnings are also boosting certain sectors."
All 20 Hainan companies listed on the Shanghai and Shenzhen exchanges rose. Hainan Yedao (Group) Co Ltd closed up 4.4 percent, while Hainan Strait Shipping Co Ltd gained 5.8 percent.
Agricultural and new energy issues gained with the country's top rare earth producer, Inner Mongolia Baotou Steel Rare-Earth, one of the top gainers, jumping by its 10 percent daily limit after China said export cuts to the sector would protect the environment.
Despite stronger-than-expected first-half earnings among Chinese-listed companies, analysts said the index was unlikely to break above the 120-day moving average at 2,700 points in the near term.
"Investors still don't have huge expectations for a significant turnaround, with concern about economic growth and property policies remaining in focus," said Zhang Gang, analyst at Central Securities in Shanghai.
China Satcom Guomai Communications Co Ltd was the biggest gainer on the Shanghai market, up by its 10 percent daily limit after a media report of a cooperation agreement with China Telecom Corp Ltd. (Additional reporting by Jun Ebias; Editing by Chris Lewis)