AN exhibition tracing the life and culture of Hong Kong's early settlers through more than 300 important cultural relics is now being held in the Hong Kong Museum of History. Using photographs, maps, models and audio visual programmes, ''Archaeological Discoveries of the Ancient Yue people in South China'' gives a comprehensive account of the evolution of the Yue people from the prehistoric period to the Han dynasty, coveringa time span of around 10,000 years. Speaking at the opening ceremony of the exhibition, Urban Councillor, professor Leung Ping-chung, said due to incomplete historical records, little was known about the cultural characteristics and living habits of the ancient Yue people. ''But, from the mid-20th century onwards, the mystery of this unique tribe was gradually disclosedby increasing archaeological excavation and surveys,'' he said. ''A lot of archaeological work has been conducted in Hong Kong and Shenzhen in recent years and remarkable discoveries have been made. ''These have produced a clear picture of the prehistoric culture of Hong Kong and Shenzhen, both cities being the settling place of the ancient Yue people,'' professor Leung said. Jointly presented by the Urban Council, the Shenzhen Museum, and the Anthropological Museum of Zhongshan University, the exhibition features a large number of prehistoric stone tools and household objects, ritual stone objects, pottery vessels, bronze implements, textiles and shell and bone objects. These relics were unearthed from various archaeological sites including cave sites in Fenghai county, hill and shell midden sites in Xiqiaoshan, and coastal sand dune sites in both Shenzhen and Hong Kong, professor Leung said, adding that the relics reflected the life style of the indigenous Yue people in different environments. ''Archaeological Discoveries of Ancient Yue People in South China'' is open until February 20, 1994 at the Hong Kong Museum of History situated in Kowloon Park. The museum is open from 10 am to 6 pm, Mondays to Saturdays and from 1 pm to 6 pm on Sundays and public holidays. It is closed on Fridays. Admission charge is $10 or $5 for students and senior citizens.