* Strong China factory data buoys global markets
* Hang Seng Index jumps 1.9 percent, H-shares rally
* Shanghai Composite up 0.9 pct; 2,700-level tough resistance
* Bank stocks firmer after Basel agreement on capital raising
(Updates to close)
By Vikram S Subhedar and Farah Master
HONG KONG/SHANGHAI, Sept 13 (Reuters) - Shares in Hong Kong and Shanghai rose on Monday on optimism that strong Chinese growth would underpin the global economic recovery despite weakness in major Western economies.
Markets were also supported by gains in bank shares after new bank capital rules agreed by global regulators were not as harsh as initially feared.
Factories in China ramped up production in August at a faster clip than markets had expected, while robust imports pointed to strong domestic demand, according to data released on Friday and Saturday. [ID:nSGE685069]
Markets have been worried that global weakness along with Beijing's official campaign to rein in surging property prices and bank loans could weigh on Chinese growth.
Hong Kong's benchmark Hang Seng Index <.HSI> ended up 1.9 percent, its biggest single-day rise in nearly three months, at 21,658.4 points.
"The strong data from China, in particular industrial production, which comes on top of firm import numbers, is a big positive for the market," said Steven Lam, a vice-president at Karl-Thomson Securities in Hong Kong.
Bank shares firmed after global regulators agreed on capital rules that were aimed at preventing another credit crisis but were less stringent than feared. [ID:nLDE68B0DC]
The global banking sector will still have to raise hunreds of billions of dollars in fresh capital, but the new rules, known as Basel III, give them a longer lead-in time than expected, easing fears of a flood of new share issues which would have weighed heavily on stock markets.
Top European lender HSBC Holdings Plc <0005.HK> rose 1.8 percent and had the biggest positive impact on the Hang Seng index. Chinese bank shares were also higher, led by China Construction Bank Corp <0939.HK>, which rose 2.1 percent.
The Hang Seng Index could retest its August high around 21,800 if it is able to break through trendline resistance decisively, analysts said, although its advance may be limited as it approaches technically overbought conditions.
The China Enterprise Index <.HSCE> rose 2.1 percent, led by resources plays, which jumped on expectations of continued strong demand from Chinese industries for raw materials.
China Shenhua Energy Co Ltd <1088.HK>, the world's most valuable coal producer, rose 2.9 percent while top oil and gas producer CNOOC Ltd <0883.HK> rose 4 percent as crude prices touched a one-month high. [ID:nSGE68C007]
SHANGHAI FIRMS
The Shanghai Composite Index <.SSEC> rose 0.9 percent to 2,688.3 points, but failed once again to cross strong near-term resistance seen at the 120-day moving average of 2,700.
While the Chinese factory data allayed concerns of a sharp economic slowdown, other reports showed inflation last month rose to a 22-month high, reviving worries about further policy tightening.
Investors still preferred select sectors for which the government has announced supportive measures, such as alternative energy and pharmaceuticals, said Zhang Gang, analyst at Central Securities.
Wind power company Dongfang Electric Corp Ltd <600875.SS> rose 4 percent, while Inner Mongolia Yili Energy Co Ltd <600277.SS> rose 4.4 percent.
Property shares outperformed the broader index as investors were relieved that no new property controls were announced after the strong August data. Shanghai's property sub-index <.SSEP> rose 1.6 percent.
"From a policy perspective, they have only said property controls will continue but they have not announced new rules," said Xu Yinhui, analyst at Guotai Junan Securities in Shanghai.
Property companies dominated the largest gainers list with Beijing Dalong Weiye Real Estate Development <600159.SS> jumping its 10 percent limit. China Vanke <000002.SZ>, the country's largest listed developer, rose 2.3 percent. ($1=6.769 Yuan)