HK shares reverse gains on China telco profit taking

* HK shares reverse course as China telcos slide

* Local property stocks climb on improved home sales

* Turnover inches up to HK$30 billion by midday

(Updates to midday)

By Parvathy Ullatil

HONG KONG, Jan 6 (Reuters) - Hong Kong shares fell more than 1 percent on Tuesday, pulling back from a three-day, 9 percent rally, with Chinese telecom stocks retreating sharply as investors booked profits on recent gains.

China Mobile (0941.HK) fell 3.4 percent to HK$82.10 while smaller rival China Unicom (0762.HK) dropped 5.9 percent.

Both stocks had rallied sharply in the last two sessions on hopes that Chinese telecom companies will be able to offer third generation network services soon, after Beijing approved the long-awaited issuance of 3G licences last week.

China's state council did not say when the licences would be issued to the telecom operators, but market talk said they may be handed out as early as Wednesday, giving investors an opportunity to lock in gains.