* HSI +1.3 pct, H-shares +1.9 pct, CSI300 +0.7 pct
* Coal, property counters rebound after correction
* Small banks rise on progress with employee stock ownership plan (Updates to midday)
By Grace Li
HONG KONG, Sept 3 China shares rose for a fourth straight day on Wednesday, spurred by two surveys showing activity in China's services sector rebounded in August after a drop in July, pushing the major indexes to multi-month highs.
The Hong Kong market followed suit, with its benchmark index scoring the best rise in six weeks.
The services purchasing managers' index (PMI) compiled by HSBC/Markit jumped to 54.1 in August - the strongest in 17 months - from a nine-year low of 50.0 in July, while the official non-manufacturing PMI rose to 54.4 from July's six-month low.
By midday, the Hang Seng Index, which had ended the previous three sessions flat, was up 1.3 percent at 25,077.46 points. The China Enterprises Index of the top Chinese listings in Hong Kong rose 1.9 percent.
The CSI300 of the leading Shanghai and Shenzhen A-share listings added 0.7 percent to its highest since mid-December, while the Shanghai Composite Index climbed 0.6 percent to 2,279.29 points, a 15-month high.
Liu Jingde, analyst at Cinda Securities in Beijing, said the rises of the past few days can be seen as the beginning of another rally after a consolidation.
"With the economy being stable, though not obviously improved, the recent gains of the indexes are just a recovery after falling for so many years," Liu said.
Blue-chips were broadly stronger, including the recently beaten down coal and property companies.
Yanzhou Coal Mining jumped 6.4 percent in Shanghai and 3.3 percent in Hong Kong.
China Vanke, Poly Real Estate and China Merchant Property Development all added more than 1 percent, though the services surveys showed a cooling property sector remained a drag on the economy.
"There are still fears in the market about a crash in China's growth and a property market collapse," said Laura Luo, head of Hong Kong and China equities at Baring Asset Management (Asia) Limited, at a briefing on Tuesday.
"In my view, China is a re-rating story and the country is undergoing unprecedented structural reforms which may cause short-term pains but will lead to long term gains."
Smaller banks also outperformed after mainland media reported on progress with an employee stock ownership plan in financial firms, quoting a senior official from the China Securities Regulatory Commission.
Bank of Beijing climbed 3.2 percent and China Merchants Bank 0.8 percent.
China Mobile gave the biggest boost to the Hang Seng, up 3.1 percent to a six-year high. The telecom giant has started the pre-order services for a new 4G cellphone, which is expected to be iPhone 6. (Editing by Shri Navaratnam)