Chinese shares advance despite lower PMI, Hong Kong mixed
* HSI +0.2 pct, H-shares -0.3 pct, CSI300 +0.4 pct
* ChiNext strong as investors return to growth stocks
* Defence firms strong after Xi calls for military innovation
* Macau gaming sector weak ahead of August data (Updates to midday)
By Grace Li
HONG KONG, Sept 1 (Reuters) - Chinese shares rose on Monday, with defence and media names leading the gains, shrugging off a lower-than-expected official Purchasing Managers' Index (PMI) that added to signs of softness in the economy.
Hong Kong's benchmark index also started the month on a firmer footing as some heavyweight stocks regained momentum after falling last week, but the H-share index fell a bit.
China's official PMI slipped from a 27-month high to 51.1 in August, the government said on Monday, just short of the median forecast of 51.2 in a Reuters poll.
By midday, the Hang Seng Index had inched up 0.2 percent to 24,784.56. The China Enterprises Index of the top Chinese listings in Hong Kong was off 0.3 percent.
The CSI300 of the leading Shanghai and Shenzhen A-share listings added 0.4 percent, while the Shanghai Composite Index was up 0.6 percent at 2,229.55.
"The market had made adjustments after the bad credit data, HSBC PMI, and some other weak economic figures released earlier," said Zheng Weigang, a senior trader at Shanghai Securities. "Funds have been gradually transferring to those hot spots, the non-cyclical sectors."
The Nasdaq-style ChiNext Composite Index of mostly high-tech start-ups listed in Shenzhen was up 1.6 percent, its biggest rise in two weeks.
Defence stocks extended gains on Monday, bolstered by President Xi Jinping's comment that China will spur military innovation. [ID: nL3N0R00AZ]
AVIC Aircraft jumped 5.7 percent and China Avic Electronics climbed 4.9 percent.
Media companies posted strong gains after a recent correction. Anhui Xinhua Media soared the maximum allowed 10 percent and People.cn 8.3 percent.
In Hong Kong, insurer AIA Group leapt 2.5 percent, while Tencent Holdings edged up 0.9 percent. Both suffered losses last week on profit-taking.
Macau casinos were weak ahead of August gambling revenue data due later in the day. Sands China, MGM China and Wynn Macau all shed more than 2 percent.
On Saturday, casino dealers working for the gambling hub's SJM Holdings started industrial action for the first time in the Chinese territory as discontent over salaries and working benefits spreads. SJM lost 1.5 percent. (Editing by Alan Raybould)
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