(Updates to midday)
* HSI dives 2.4 pct, CSI300 slips 0.2 pct
* 2012 outperformers hit, investors cut risk after Europe
* Chinese oil majors slide as oil prices hammered
* Chalco strong on reported market-leading rare earths role
By Clement Tan
HONG KONG, May 7 (Reuters) - Hong Kong shares fell 2.4 percent on Monday and looked set for their worst day in six months as renewed doubts about the euro zone's ability to tackle its debt crisis after elections in Greece and France hit oil firms and outperforming stocks.
Mainland Chinese markets were also weaker largely due to a drop in property shares, but gains in the Aluminum Corporation of China (Chalco) helped support overall prices.
The CSI300 Index slipped 0.2 percent at midday, while the Shanghai Composite Index lost 0.3 percent, both poised for their first loss in four sessions. Shanghai A-share volume was at its highest at midday in five sessions.
The China Enterprises Index of the top Chinese listings in Hong Kong and the broader Hang Seng Index each sank 2.4 percent. Excluding sessions with turnover bumped up by block placements, midday bourse turnover neared the highest in slightly over a month.
"The selling was heaviest in the first hour of trade this morning, probably as a reaction to overnight news on Europe," said Jackson Wong, Tanrich Securities' vice-president of equity sales.
CNOOC Ltd and PetroChina Co Ltd slumped 4.5 and 3 percent in Hong Kong, hit by sliding oil prices after the French and Greek elections raised concerns about the euro zone's austerity measures and reignited fears of falling energy demand.
Fuel prices in the mainland could be cut as early as this week due to the drop in global oil prices, the official Shanghai Securities News reported on Monday. PetroChina lost 1.1 percent in Shanghai.
Since Friday, U.S. crude has lost more than 6 percent, while Brent has dropped over 4 percent.
Chinese Internet giant Tencent Holdings lost 5 percent, further slipping from an all-time high recorded last Thursday and before the Facebook initial public offering pricing disappointed investors by being set at the midpoint of an indicative range.
Tencent, which had risen partly due to the spill-over optimism about the Facebook IPO, has shed 6.6 percent in the last two sessions since, but is still up 48 percent on the year.
POLICY DRIVE MAJOR MOVES IN MAINLAND MARKETS
Chinese property developers were also hit after the official news agency Xinhua reported that the Industrial and Commercial Bank of China (ICBC) suspended a discount on mortgages for first-time home buyers in the country.
The Shanghai property sub-index was down 0.8 percent. Shenzhen-listed China Vanke, the country's largest developer by sales, slipped 1.8 percent.
Strength in Chalco limited losses in both Hong Kong and mainland Chinese markets on Monday. It gained 4 percent in Shanghai and 1.4 percent in Hong Kong.
The official China Securities Journal reported on Sunday that the country's vice minister for industry and information technology said that Chalco's parent company, Sinalco, will play a leading role in the consolidation of rare earth industry. (Editing by Miral Fahmy)