China, Hong Kong stocks tepid; some cash concerns linger
* HSI +0.1 pct, H-shares -0.4 pct, CSI300 flat
* Chinese financial and property sectors weak on liquidity concerns
* Window dressing by funds boost telecom, gambling stocks
* Tencent up 2.3 pct to record high, govt investment plan welcomed
By Yimou Lee
HONG KONG, Dec 30 (Reuters) - China shares shed most of their early Monday gains, capping Hong Kong markets, after a government pledge to keep liquidity and financial markets stable next year failed to assure investors.
Premier Li Keqiang said China will keep liquidity at an appropriate level in 2014 to maintain the stability of financial markets and the broader economy, according to a statement published on the website of the State Council late on Sunday.
By midday, the CSI300 index of the largest mainland shares was flat, while the Shanghai Composite Index edged up 0.1 percent at 2,102.54 points. Both swung between negative and positive territory in the thin morning trade.
The Hang Seng Index was up 0.1 percent at 23,261.59 points and appeared on track for a fourth straight daily rise. The China Enterprises Index of the top Chinese listings in Hong Kong fell 0.4 percent.
"In light trading, funds are trying to window dress and heavy-weighted cyclical and financial stocks are weighing down the market," said Jackson Wong, Tanrich Securities' vice-president for equity sales in Hong Kong.
"The overnight rate is still a concern and whether the People's Bank of China will do reverse repos this week will be another key," Wong said.
Li's statement came after cash crunches in China's money markets early this month. The central bank initially did not make large cash injections to help banks cope with elevated cash demand at the year-end.
"We will stick to the prudent monetary policy, keep appropriate liquidity, realize reasonable growth in credit and total social financing and keep prices largely stable," Li was quoted as saying.
Chinese financial and property counters led losses among industry groups. China Vanke, the country's largest developer by sales, fell 1.7 percent in Shenzhen, while rival SOHO China shed 2.7 percent in Hong Kong.
China Life and China Construction Bank < both dropped 1 percent in Hong Kong.
Bank of China sank 2.3 percent to its four-month low in Shanghai, while mid-sized lender China Minsheng Bank sank 1.2 percent in Shanghai and 0.6 percent in Hong Kong.
Traders said "window dressing" buying by fund managers to improve the appearance of portfolios ahead of the half-year gave some sectors a boost, with Chinese telecom and Macau gambling stocks particularly strong.
Galaxy Entertainment was up 1.5 percent and Sands China rose 1.1 percent.
Telecom sectors were furthered boosted after China said investment in that industry is expected to top 350 billion yuan ($57.7 billion) in 2014.
Tencent Holdings rose 2.3 percent to another record high on Monday, while China Telecom gained 0.8 percent.