* Hong Kong rises 0.69 percent; Shanghai gains 0.26 percent
* HK developers, banks rebound on bargain-hunting
* ICBC retreats in Shanghai after rights issue (Updates to midday)
By Jun Ebias and Farah Master
HONG KONG/SHANGHAI, Nov 24 (Reuters) - Shares in China and Hong Kong had posted modest gains by midday on Wednesday, coming off of multi-week lows as investors bought beaten down stocks such as banks and commodity-related counters.
Investors also bought back into Hong Kong developers, which fell sharply in recent sessions after the government announced fresh measures aimed at curbing fast-rising property prices, mainly on short-covering, dealers said.
Overall sentiment remained fragile as speculation about a rate rise in China, worries over the debt problems in Ireland and tensions on the Korean peninsula kept investors from making huge bets.
"There is so much uncertainty in the market, that's why there is not much leg in this rebound," said Alex Wong, director at Ample Finance Group. "The market may not go down that much again, but there is not much upside either, so it will trade in a narrow range over the short term."
The benchmark Hang Seng Index was up 0.69 percent at 23,054.61 at the midday trading break, led by banks and property developers.
The index would likely trade between 22,900 and 23,200 for the rest of the week, Wong said.
The property sub-index gained 1.15 percent, snapping three days of losses that brought it to a two-month low. But the rebound may not be sustained as the government's imposition of a stamp duty on real estate transactions and other measures to cool the red-hot sector may drag down property prices, especially for residential units.
A senior executive at developer Wheelock & Co Ltd said prices for Hong Kong residential property could fall as much as 10 percent in coming months.
Wheelock inched up 0.5 percent, underperforming both the Hang Seng Index and the property sub-index.
Bigger rivals Sun Hung Kai Properties Ltd gained 1.5 percent and Cheung Kong (Holdings) Ltd rose 1.6 percent.
Banks also rebounded, with Bank of East Asia up 2.7 percent and BOC Hong Kong (Holdings) Ltd 1.5 percent higher.
SHANGHAI EDGES UP IN CHOPPY SESSION
China's key stock index edged up 0.26 percent in a choppy trade on Wednesday, with a plunge in Industrial and Commercial Bank of China Ltd (ICBC) curbing gains in other large-cap financial and commodities issues.
ICBC, the second-biggest weight in the Shanghai index, opened down by its 10 percent daily limit after completing its $6.8 billion rights issue. The world's most valuable lender recovered slightly to trade down 9 percent by midday.
The bank's shares, suspended for six trading days, were effectively catching up with the broader market's decline over the past week on worries about the impact of monetary tightening.
In Hong Kong, ICBC rose 1.4 percent on bargain-hunting, recovering from three days of losses during which it shed a total of 5 percent.
The Shanghai Composite Index was at 2,835.7, after falling 1.2 percent at the open and rebounding mid-morning to up more than 1 percent.
Analysts said the market was due for a rebound after falling around 9 percent in the past two weeks. They cited the 250-day moving average, now at 2,885, as a reasonable point for the index to rebound to, given excessive recent falls.
But they cautioned that any significant upside would be hampered by the restriction of capital flows into the market after the central bank's official monetary tightening steps, including two increases in bank required reserve ratios.
"Investors are expecting the release of next month's inflation figures will be accompanied by a new cycle of monetary tightening," said Xu Yinhui, analyst at Guotai Junan Securities in Shanghai.
Volume continued to slip, extending November's meagre turnover levels compared with October's liquidity fueled rally, when the Shanghai Composite jumped 12 percent on the month.
Turnover of Shanghai A shares slipped to 78 billion yuan ($11.74 billion) from 79 billion yuan on Tuesday morning.
Large-cap banks were nearly all higher as retail investors who had fled the sector from early November eyed lower valuations as a reason to buy back in.
China Everbright Bank Co Ltd gained 1.6 percent. China Minsheng Bank Corp Ltd was 1.4 percent higher, while Agricultural Bank of China Ltd rose just 0.4 percent.
Brokerages were among the top gainers, with top brokerage Citic Securities Co Ltd up 4.5 percent.
Commodities also gained. Oil major China Petroleum & Chemical Corp (Sinopec) up 0.6 percent and China Shenhua Energy Co Ltd, the world's most valuable coal producer, up 0.5 percent. (Editing by Chris Lewis)