HK shares pare gains; local developers weigh

* HK shares pare gains as investors dump developers

* Financials rise on China measures to boost liquidity

* Telecoms gain on 3G licence speculation (Updates to midday)

By Jun Ebias

HONG KONG, Dec 4 (Reuters) - Hong Kong shares pared gains on Thursday as investors dumped local developers after banks raised their mortgage rates, while financial stocks rose in response to China's planned measures to further boost liquidity.

The benchmark Hang Seng Index .HSI ended the morning session up 0.7 percent or 91.16 points at 13,679.82. The index rose 2 percent at the opening session, as investors cheered China's latest effort to stabilise its stock market.

China's cabinet on Wednesday approved measures aimed at keeping the stock market steady, boosting bond issuance and increasing the supply of credit. [ID:nPEK83991]

"There is an economic conference by top leaders in China right now and the market is expecting more stimulus. That's supporting investor sentiment," said Y.K. Lee, analyst at Core-Pacific Yamaichi.

China's top lender ICBC (1398.HK) gained 1.8 percent, while smaller rival China Construction Bank (0939.HK) rose 2.1 percent. These banks would likely benefit from Beijing's plan to spend $586 billion on infrastructure, Citi said in a report.

"We believe big state banks are likely to have better loan growth visibility in 2009, given strong government relationships (and) better access to infrastructure projects," Citi said in a Dec 3 report.

The nation's No.1 insurer, China Life Insurance (2628.HK), rose 2.7 percent, while smaller rivals Ping An Insurance (2318.HK) soared 5.5 percent and PICC P&C (2328.HK) surged 6.4 percent.

Hong Kong developers Sino Land (0083.HK) lost 2.4 percent, Sun Hung Kai Properties (0016.HK) shed 1.3 percent and Cheung Kong (Holdings) (0001.HK) fell 0.7 percent.

Bank of China (Hong Kong) and HSBC this week raised their mortgage rates by between 50 to 75 basis points.

Index heavyweight HSBC (0005.HK) fell 0.6 percent.

A total of $22.2 billion ($2.8 billion) worth of shares changed hands, up slightly from HK$21.0 billion at midday on Wednesday.

The Chinese Index of top locally listed mainland Chinese firms .HSCE was up 1.3 percent to 7,324.81.