HK, China shares rise on Beijing's policy reassurance

HONG KONG, July 24 (Reuters) - Hong Kong and China shares rose on Friday with bank stocks buoyed by Beijing's reiteration of an easy monetary policy regime while coal miner China Shenhua surged after starting construction on a new project.

The Chinese Communist Party's decision-making Politburo said on Thursday that recovery in the world's third-largest economy was not yet on a solid footing and that Beijing would stick to an appropriately loose monetary stance and proactive fiscal policy. [ID:nLN217216]

Here are the index moves and top stock moves in both markets by midday-

HONG KONG

* The benchmark Hang Seng Index .HSI trimmed gains to 0.5 percent, at 19,909.95, after breaching 20,000 points for the first time since the Lehman Brothers debacle in September 2008.

The guage is headed for it second straight winning week, advancing 5.9 percent despite a two-session pullback.

* The index fell off early highs as investor took profits on local property stocks following their strong run-up. Top developer Sun Hung Kai Properties (0016.HK) fell 2 percent while Li Ka-shing's property flagship Cheung Kong (0001.HK) shed 1.3 percent.

* The China Enterprises Index .HSCE, which represents top locally listed mainland Chinese stocks, had risen 0.8 percent to 11,914.35.

* Foxconn International Holdings (2038.HK), a unit of Taiwan's Hon Hai Precision (2317.TW), tanked after the cell phone manufacturer said it might record a loss in the second half owing to lower demand and pricing for its products amid the global economic downturn. [ID:nHKG260440]

The stock dropped 6.2 percent to HK$5.28.

* "We were expecting a weak first half but we didn't expect the company to report a loss. Our estimates are 30 percent below consensus but the company seems to have done even worse," said Christine Wang, analyst with HSBC in Taiwan.

Wang said the company's outlook for the second half, while stronger than that in the previous six months, is still cloudy since Nokia has already sounded a note of caution. [ID:nLG204714]

* Chinese frozen meat processor China Yurun Food (1068.HK) slid 12.6 percent to HK$12.50 after it said it would sell HK$1.72 billion (US$222 million) worth of new shares to its controlling shareholder, raising capital for expansion of its production capacity. [ID:nHKG364933]

China Yurun was the top traded stock in the morning session with shares worth HK$3.37 billion changing hands.

* Car battery maker BYD Co Ltd (1211.HK) rose 1.8 percent to HK$41.45 on its plan to issue up to 100 million A shares on the Shenzhen stock exchange, to raise about 2.85 billion yuan to fund expansion.

SHANGHAI

* The Shanghai Composite Index .SSEC ended the morning up 1.4 percent at 3,375.158 points, buoyed by signs that China would continue policies to boost economic growth.

* The index is on track for its best weekly performance in more than two months with a gain so far of 5.8 percent.

* Gaining Shanghai A shares outnumbered losers by 469 to 441, while turnover for Shanghai A shares eased to 99.5 billion yuan ($14.6 billion) from the previous morning's 109 billion yuan.

* "The market is likely to gain next week. The loose monetary policy will remain in place for the rest of this year, which will directly bolster investor confidence," said Li Wenhui, an analyst at Huatai Securities in Nanjing.

* Energy shares led the gain, with PetroChina (601857.SS), the most heavily weighted share in the index, jumping 4.50 percent to 16.04 yuan.

Li said China appeared unlikely to cut retail fuel prices this month, in line with recently firm international crude oil prices.

* Coal shares surged, with China Shenhua Energy (601088.SS) climbing 8.03 percent to 40.75 yuan after saying construction had begun on a $331 billion project in Indonesia in which it holds a 70 percent stake. The stock (1088.HK) rose 5.1 percent to HK$31 in Hong Kong.

* Coal shares were also lifted by positive power data. China's power output in mid-July via major grids was up 7.9 percent on the year at an average 11.572 billion kilowatt hours (KWh) per day, the official Shanghai Securities News reported on Friday. [ID:nPEK366811]

* Major shipbuilders rose, with Guangzhou Shipyard (600685.SS) and China State Shipbuilding (600150.SS) climbing 4 percent after China's stock regulator said it would review on Monday an application by China's top shipbuilding firm for an initial public offering of stock worth around $1 billion [ID:nSHA316539].

* Property shares were soft with China Vanke (000002.SZ) off 0.35 percent at 14.37 yuan after the official Financial News reported that China's banking regulator reiterated it had not changed its policy on purchases of second homes and would stick to it, although it saw some signs of an asset bubble in a recent surge in house prices.

(Reporting by Parvathy Ullatil in HONG KONG and Claire Zhang in SHANGHAI; Editing by Edmund Klamann and Jacqueline Wong)