* Shanghai Composite slips 0.5 percent, resources weigh
* Hang Seng up 0.4 pct as local property, HSBC support
* Coking coal producers outperform as tight supply helps
* Market players see commodities pull back as temporary
(Updates to close)
By Vikram S.Subhedar and Samuel Shen
HONG KONG/SHANGHAI, Jan 5 (Reuters) - Shanghai shares slipped on Wednesday on profit taking in resource stocks after commodities such as oil and copper retreated from multi-year highs.
Hong Kong's Hang Seng , however, eked modest gains to close 0.4 percent higher following a rally in local developers and a rise in heavyweight HSBC that helped offset a weak performance of resource shares.
HSBC rose 2.4 percent tracking gains in its London-listed shares.
Shanghai's key stock index eased 0.5 percent.
"The technical correction is natural due to profit-taking after rapid gains," said Li Huiyong, analyst at Shenyin Wanguo Securities Co. "The market is not yet clear in its direction and some people are worried about signs of slowing economic growth."
While commodity related stocks fell on Wednesday, most analysts believe an improving outlook for the global economy will support commodity prices presenting "buy on dips" opportunities for related stocks.
Coking coal producers in particular saw another day of gains and outperformed other commodity-related peers as well as the broader market as floods in Australia kept supply tight and prices high.[ID:nAUSSIE]
Xishan Coal , the listed arm of China's top coking coal producer, rose 4 percent. Fushan Energy rose 1.2 percent and Hidili Industry rose 3.5 percent with shares poised for further gains.
Wei Ouyang, a basic resources analyst at Standard Chartered in Hong Kong, has a "outperform" rating on listed coking coal producers.
Chinese coking coal prices have risen by 5 percent to 12 percent across the regions since the bank's last update in early October according to Standard Chartered.
"The large magnitude signalled not only a catch-up but also anticipation of a strong price outlook," said Wei.
LOCAL PROPERTIES, HSBC LIFT HK
A rally in shares of HSBC, which has a nearly 15 percent weight in the benchmark Hang Seng, helped the index end the trade in positive territory. The bank's London-listed shares rose amid a broad rally in European banking stocks.
Hong Kong property developers led by Sun Hung Kai Properties Sino Land also underpinned the broader market on expectations that strong capital inflows into the territory and sustained strength in rental income would support prices.
Sun Hung Kai, a top pick for 2011 of several brokerages including Bank of America Merrill Lynch, HSBC and Daiwa Capital, rose 1.9 percent and was the biggest contributor to Hang Seng's rise behind HSBC. Cheung Kong Holdings rose 1.1 percent.
Daiwa Capital rated Sun Hung Kai as one of its six best investment ideas in Asia for 2011.
Jones Kan, a property analyst at Daiwa, said Sun Hung Kai is a play on asset inflation in Hong Kong and has the largest quantity of property assets among peers and its properties stand out in terms of quality.
Kan has a price target of HK$153 on the stock, 13 percent above current levels. (Editing by Tomasz Janowski)
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