UPDATE 2-China insurer Ping An dives on Fortis plans

(Adds Ping An's comment in fifth paragraph, updates closes)

HONG KONG, July 2 (Reuters) - Shares in China's Ping An Insurance posted their second largest single-day fall on Wednesday as markets worried about the firm's plan to shell out more cash to maintain its stake in Belgium's Fortis.

Ping An (2318.HK: Quote, Profile, Research) (601318.SS: Quote, Profile, Research), which along with bigger rival China Life (2628.HK: Quote, Profile, Research) has major investments in mainland Chinese equity markets, fell 8 percent in Hong Kong to a three-month low. Its Shanghai stock slid its daily limit of 10 percent.

Analysts cited a range of factors for the sudden plummet that accelerated in the afternoon, saying institutional investors were acting on fears China's No. 2 life insurer, hard pressed by the Shanghai bourse's eight-month bear run, is ill-placed to be helping Fortis in its plan to raise capital.

An article in the Shanghai Securities News discussed risks involved in Ping An's purchase, announced last week, of 5 percent of a 1.5 billion euro share issue by Belgium's Fortis (FOR.AS: Quote, Profile, Research).

Shares in China Life slid 3.5 percent. The Hang Seng Index .HSI declined 1.8 percent.

After the close of trading, Ping An said it was unaware of any reasons for its stock plunge, reaffirming it was not participating in any negotiations related to intended acquisitions.

For the company statement, click on: here 0702137.pdf "They would have to inject more into Fortis. This is being viewed in a negative light," said Louis Wong, research director with Philip Securities.

Ping An's shares hit a session low of HK$52.2 in their worst single-day selloff since Jan. 22, when U.S. subprime bond worries took their toll on financial counters.

Its Shanghai-listed shares, closed to most foreign investors, fell their daily limit of 10 percent. (HK$1.136=1 yuan) (Reporting by Parvathy Ullatil, Kevin Plumberg and Alison Leung; Editing by Edwin Chan and Jonathan Hopfner)