(Updates to midday)
* HSI up 1.1 pct at 5-mth high, H-share index up 2.1 pct
* CSI300 up 2.4 pct, Shanghai Comp up 2.1 pct
* Sinopec shares near 5-month high, lead energy sector rally
* ZTE shares slump 4.9 percent, extend drop on U.S. Congress
* China Molybdenum triples in Shanghai IPO debut, shares
By Vikram Subhedar
HONG KONG, Oct 9 (Reuters) - Hong Kong shares rose to a
five-month high and China shares gained more than 2 percent in
active trade on Tuesday, as hopes of more steps to support the
market from Beijing spurred rallies in large-cap banking and
A report in China Daily said market regulators had pledged
to speed up approvals for quotas for Qualified Foreign
Institutional Investors (QFIIs), the only way for offshore
investors to directly access China's domestic markets.
"A lot of investors are underweight China in their
portfolios so any talk on QFII is likely to encourage them to
start getting involved again," said Tom Kaan, a director at
Louis Capital Markets in Hong Kong.
The Hang Seng rose 1.1 percent by the midday trading
break. Chinese banks and oil producers, which carry the biggest
weightings in the local benchmark indexes, lifted the China
Enterprises index 2.1 percent higher.
The CSI300 index of top Shanghai and Shenzhen
listings rose 2.4 percent while the Shanghai Composite
rose 2 percent. Volumes in Shanghai in the morning session were
equivalent to recent full-day totals.
The report of more reform comes after Chinese regulators
cleared the way for overseas investors to buy more than $30
billion worth of stocks and bonds in China, exceeding the
previous programme limit, as Beijing seeks to attract more
foreign portfolio investors.
It also comes amid speculation of more government funds
being put to work to boost investor confidence.
China's largest listed broker Citic Securities
rose 3.1 percent in Shanghai. Industrial Securities
rose 10 percent, the biggest gainer on the CSI300,
while Haitong Securities rose 3.7 percent.
In a sign of returning risk appetite, shares of China
Molybdenum Co Ltd nearly tripled after listing in
Shanghai before trading was suspended.
But there was no respite for ZTE Corp shares which
extended losses to fall 4.9 percent after a U.S. congressional
report said the company could pose a security threat dashing
hopes of expansion plans.
ZTE shares are down 10.6 percent since last Friday's close.
BANKS, OIL PRODUCERS UP
ICBC shares rose 2.2 percent and were the top
boost on the Hang Seng after a report that China's Central
Huijin Investment, a state-owned asset management company, had
bought 6.3 million shares of the bank in the third quarter.
That led to speculation that Huijin may lift its stake in
other Chinese banking shares, traders said, as authorities try
to restore confidence among the mainland's retail investors.
"Markets have gotten caught up in this talk of government
funds buying banking shares before and I'd be careful about
chasing this move," said Kaan.
Chinese financials listed in Hong Kong are flat for
the year compared with a 14.2 percent rise on the Hang Seng.
Energy shares, in particular oil producers which have
suffered over the past week as crude prices weakened, also
recovered with Sinopec surging 4.4 percent to break
above its Aug. 17 high.
China Oilfield Services, which operates rigs, rose
3.7 percent. Petrochina was up 2.9 percent.
(Editing by Edwina Gibbs)