Iron ore hits two-week high on hopes China will contain property crisis

July 26 (Reuters) - Dalian and Singapore iron ore futures touched two-week highs on Tuesday, extending a rally driven by hopes that top steel producer China's support for its struggling property sector would help boost demand for the steelmaking ingredient.

The most-traded iron ore, for September delivery, on China's Dalian Commodity Exchange DCIOcv1 ended morning trade 4.1% higher at 738 yuan ($109.28) a tonne, after hitting its highest since July 11 at 746 yuan earlier in the session.

On the Singapore Exchange, iron ore's front-month August contract SZZFQ2 climbed 4% to $109.60 a tonne, its strongest since July 12.

Sentiment has improved following reports that China will launch a real estate fund to help property developers cope with a crippling debt crisis and restore confidence in the industry.

Dalian iron ore prices have rebounded about 15% from a seven-month low hit on July 20, while SGX iron ore has risen 14% from an eight-month low of $95.50 a tonne touched on July 18, when news of mortgage-payment boycott on unfinished houses rattled investors.