* HSI seen at 27,000 at end-2011; 24,400 by mid-2011
* Expected annual gain 17.2 percent vs 5.3 percent in 2010
* China tightening concerns ease, prices seen attractive
* Earnings to drive market direction in near-term
By Vikram S.Subhedar and Christina Lo
HONG KONG, March 24 (Reuters) - Hong Kong shares are likely to rise about 17 percent this year, with gains weighted towards the latter half, as concerns over Chinese policy tightening ease, a Reuters poll showed.
The Hang Seng index, trading near flat so far this year, is seen rising to 27,000 by year-end, according to the median forecast of 23 strategists polled over the past week. This is lower than 27,500 forecast in a December poll.
That 17 percent rise compares with the more modest 5.3 percent advance last year, although in the near-term the mood remains one of caution as Asian markets grapple with the aftermath of Japan's devastating earthquake.
Hong Kong shares started the year on a strong note, rising over 6 percent in the first three weeks although that rally hit a roadblock as spiralling Chinese consumer prices spurred the central bank to hike interest rates and curb bank lending.
With bank lending slowing in February and rising expectations that inflation will peak by mid-year, some analysts say market players should look to position themselves for the rebound.
"It is time to get more aggressive on the market as tightening may be nearing a peak and we could see stabilization or easing in the second-half," said Francis Cheung, head of China/Hong Kong strategy at CLSA Asia-Pacific Markets.
According to Thomson Reuters data, the Hang Seng index currently trades at a multiple of 11.4 times the average earnings forecasts for the next 12 months. That compares to a 10-year mean of 14.1, suggesting those seeking value could be looking to increase exposure to the market.
On the charts, the Hang Seng found support at its 200-day moving average, currently at 22,400, indicating the weakness following the Japan earthquake may have run its course.
But as China moves to slow its economy to tame inflation, some analysts warned that gains might be tepid.
"It will be hard for companies in mainland China and Hong Kong to experience as fast a growth in earnings as in the last two years," said Mark To, head of research at Wing Fung Financial, who expects the Hang Seng to end the year at 24,600.
In the near-term, earnings are likely to dominate trading with investors already showing much more sensitivity to corporate earnings than earlier in the year.
China Coal, a large coal producer, saw its shares slide nearly 9 percent after it reported 2010 results that came in below market expectations.
Robust earnings and easing concerns over policy tightening could boost banking shares, which carry the biggest weight on the benchmark Hang Seng index, and provide a boost to the broader market.
Chinese banking shares have outperformed over the past month as investors sought bargains in the beaten down counters and as analysts revised up earnings forecasts.
Shares of China Construction Bank are up about 7 percent over the past month with larger rival ICBC, the world's biggest bank by market value, up about 5 percent. The Hang Seng is down about 0.9 percent over the same period.
(Additional reporting by Clement Tan in Hong Kong, additional polling by the Bangalore Polling Unit)