Shanghai shares hit six-week high, support Hong Kong
* HSI flat, H-shares +0.5 pct, CSI300 +2.2 pct
* BYD leads auto gains after electric car subsidies extended
* Rural-urban pension merger buoys insurers, pharma sectors
* Chow Tai Fook jumps after posting robust CNY sales
By Clement Tan
Feb 10 (Reuters) - Shanghai shares jumped to their highest level in six weeks on Monday, supporting the Hong Kong market, led by the auto sector after the Chinese government extended subsidies for electric vehicles beyond 2015.
Chinese insurers and pharmaceutical counters were buoyed by an official announcement of a merger of rural and urban pension plans. State media also reported the State Council recently ordered an acceleration in the expansion of health insurance covering serious illness for rural residents.
Gains came in robust volumes in the mainland, ahead of a fresh batch of macroeconomic data later in the week. The People's Bank of China's two weekly scheduled open market operations will also come into focus, with maturities due to drain 450 billion yuan this week.
By midday, the Hang Seng Index was flat at 21,632 points, while the China Enterprises Index of the top offshore Chinese listings in Hong Kong rose 0.5 percent.
The H-share index has rebounded more than 2 percent from a six-month closing low on Feb. 5, but Bank of America-Merril Lynch's China equity strategist David Cui warned the bounce from technically oversold levels could fall short of the major rallies seen since the 2008-09 financial crisis.
The Shanghai Composite Index was up 1.8 percent at 2,080.5 points, its highest since Jan. 3. The CSI300 of the largest Shanghai and Shenzhen A-share listings climbed 2.2 percent.
"The A-share market was pretty solid in its return last Friday from the week-long holiday despite the slump in global markets, so that is serving as a good basis for further gains today with all the policy news flow over the weekend," said Cao Xuefeng, a Chengdu-based analyst with Huaxi Securities.
The Chinese central bank suggested in its quarterly monetary policy report released on Saturday that cash market volatility could persist as its reins in an explosion of off-balance sheet lending.
Warren Buffet-backed BYD Co soared the maximum 10 percent in Shenzhen and 4.5 percent in Hong Kong after China's Finance Ministry announced on Saturday the extension of subsidies for buyers of electric-powered vehicles after the current programme expires in 2015.
Subsidies for 2014 will be reduced by 5 percent versus 10 percent announced previously and by 10 percent in 2015, versus 20 percent announced previously.
XJ Electric and FAW Car each jumped by the maximum 10 percent in Shenzhen, with FAW also buoyed by another announcement that its January sales jumped 40.2 percent from a year earlier.
China Life Insurance jumped 2 percent in Shanghai and 1.2 percent in Hong Kong after Beijing said late on Friday it will merge pension plans for rural and urban residents, a change that encourages labour mobility.
Chow Tai Fook climbed 3.4 percent, outperforming most in the Chinese consumer sector after reporting that same-store sales growth of 15 percent over the Chinese New Year from last year's corresponding period.
Landing International surged 14.3 percent after the Chinese property developer said late on Friday it is jointly developing a $2.2 billion casino resort in South Korea with Genting Singapore.
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