* Reuters reports Ping An asked to buy stake in Country Garden

* Ping An shares fall 5%; Country Garden shares rise 12%

* Real estate stocks and bonds rally

HONG KONG, Nov 8 (Reuters) - China property stocks rallied and Ping An Insurance Group shares slumped to a one-year low on Wednesday after Reuters reported Chinese authorities had asked the financial firm to take a controlling stake in troubled developer Country Garden.

Country Garden shares rose to a one-month high and closed up more than 12%. Its dollar debts also rallied.

A spokesperson for Ping An said the company had not been approached by the government and denied the information reported by Reuters, which cited four sources familiar with the plan.

However, markets took it as a positive signal for the debt-laden sector, which has been weighing heavily on the broader economy.

Developers China Evergrande and Sunac China Holdings jumped roughly 30% each. An index of Hong Kong-listed mainland developers rose 2.7%.

"Such a move should mitigate or control the risks in the market," said Lu Wenxi, analyst at property agency Centaline.

"This move is a big boost to market confidence, because now the whole real estate market, especially some major real estate enterprises are under pretty big pressure, and their bankruptcy risks triggering a chain reaction."

Ping An's Hong Kong-listed shares tumbled 5.4%, their sharpest daily fall in more than a year. Turnover was the highest in almost a year.

In debt markets, some of Country Garden's shorter term bonds, such as a dollar bond maturing early in 2024 , were as much as 2 cents firmer at around 6 cents on the dollar.

Elsewhere, a Wanda Properties dollar bond maturing early in 2024 was up more than half a cent at 50.75 to the dollar. (Reporting by Anne Marie Roantree in Hong Kong. Additional reporting by Tom Westbrook in Singapore; Editing by Edmund Klamann and Kim Coghill)