* HSI -0.5 pct, H-shares -0.9 pct, CSI300 +0.2 pct
* ICBC down 2.1 pct after Goldman exit, vs 2.5 pct discount
* PICC P&C slides after $938.3 million rights issue
* China property up, urbanization meeting to be reportedly held by June
Hong Kong shares fell from a 3-1/2-month high on Tuesday, hurt by a series of fund raising moves and Goldman Sachs' exit from Industrial and Commercial Bank of China, while China markets eked out a fifth straight daily gain,
The Hang Seng Index slid 0.5 percent at 23,366.4 points after closing on Monday at its highest since early February. The China Enterprises Index of the top Chinese listings in Hong Kong shed 0.9 percent.
The Shanghai Composite Index and the CSI300 of the leading Shanghai and Shenzhen listings each reversed midday losses to end up 0.2 percent. Five days of gains helped both rebound from their 50-day moving averages in improved volume, suggesting further gains could be in store.
Shanghai volume decreased for the first time in four days as tax payments by companies put pressure on short term money market rates, but was still some 30 percent above its 20-day moving average.
"I think it's still too early to say this constitutes a fundamental shift in sentiment," said Wang Ao-chao, UOB-Kay Hian's Shanghai-based head of research.
"The moves have been very sector-specific on hopes of sectoral policy changes as the new Chinese leadership convenes various meetings in the upcoming months leading to the plenum," Wang added.
On Tuesday, the 21st Century Business Herald reported that a previously-postponed national meeting on urbanisation strategy may now be held at the end of May or early June, sparking gains for property counters.
China Overseas Land climbed 2.1 percent to its highest in more than a week in Hong Kong, while China Vanke rose 0.8 percent in Shenzhen and Poly Real Estate gained 0.6 percent.
For a second day, Chinese coal counters jumped, while mainland power producers slumped due to concerns that potential curbs on lower quality coal imports could help demand for smaller coal producers, while crimping the margins of power producers that rely on cheaper foreign imports.
Huaneng Power slumped 6.1 percent in its worst daily loss in 14 months, while Yanzhou Coal jumped another 4.3 percent in Hong Kong after rising 4.1 percent on Monday.
REBOUND TO SPUR DEALS?
Shares of Chinese banks were weaker as Industrial and Commercial Bank of China (ICBC) fell 2.1 percent in Hong Kong after Goldman Sachs ended a seven-year investment in the country's largest lender.
The magnitude of ICBC's loss in Hong Kong was smaller than the 2.5 percent discount Goldman offered its remaining 1.585 billion H-share stake, pointing at robust demand despite being priced at the top end of the marketed HK$5.47-$5.50 range.
PICC Property & Casualty fell 2.6 percent in Hong Kong after it announced plans for a rights issue to raise a combined net 5.76 billion yuan ($938.28 million) to strengthen its capital base and improve its solvency margin.
Cosco Pacific jumped 4.1 percent in Hong Kong after it agreed to sell its stake in COSCO Container Industries Ltd to one of its sister companies wholly owned by its state-owned parent China Ocean Shipping (Group) Company.
Gains on the day helped Cosco Pacific move into positive territory for the year. It is now up 1.8 percent in 2013, compared to the 3.1 percent rise on the Hang Seng Index.
The rebound from April lows in Hong Kong could lead to more companies tapping the equity markets for funds.
Two of the biggest initial public offerings will make their listing debut this week, with China Galaxy Securities on Wednesday and Sinopec Engineering on Thursday.