* HSI -0.1 pct, H-shares +0.1 pct, CSI300 +0.4 pct
* Anhui Conch rises after positive profit alert
* Ports and shipping jump on speculation about China-S.Korea FTA (Updates to midday)
By Grace Li
HONG KONG, July 3 (Reuters) - Hong Kong’s benchmark index dipped on Thursday at midday but held near the year’s high, while China shares eked out slim gains in choppy trade helped by materials and shipping sectors.
Upbeat data on the Chinese services sector released in the morning also helped mainland markets recover losses from earlier in the session.
Activity in the sector expanded at its fastest pace in 15 months in June, according to a services purchasing managers’ index (PMI) compiled by HSBC/Markit, reinforcing signs that the broader economy is stabilising.
By midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings rose 0.4 percent, while the Shanghai Composite Index was up 0.1 percent at 2,061.09 points.
The Hang Seng Index inched down 0.1 percent to 23,526.06 points, off the previous day’s highest close in almost seven months. The China Enterprises Index of the top Chinese listings in Hong Kong was 0.1 percent higher.
The rise on Wednesday brought the Hong Kong benchmark above chart resistance levels, suggesting more gains are possible in the short term.
“Most of the blue chips at the current level are still attractive,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group, who added that Cheung Kong Holdings and Hutchison Whampoa are his favorites.
“For the second half of this year, the market sentiment may improve gradually. The point is ‘gradually,'... because people (global regulators) are quite rational in being prudent. There’re no good reasons to speculate too much,” To said.
In mainland markets, stocks related to China’s northeastern region outperformed, on hopes of benefiting from a free trade agreement between China and South Korea which could come out during President Xi Jinping’s visit to the neighboring country.
Dalian Port PDA surged the maximum allowed 10 percent limit for a second day to its highest in almost three years, while Yingkou Port Liability jumped 8.7 percent.
Chinese shipping shares were also driven up with strong gains in ports groups. China Shipping Container Lines also soared by the 10-percent limit.
A couple of other companies based in Dalian were stronger, further aided by the State Council’s announcement on Wednesday to set up a new economic district in the city.
Anhui Conch Cement climbed 5.1 percent in Hong Kong and 3.9 percent in Shanghai, after the biggest cement producer in China said late on Wednesday it expected H1 net profit up about 90 percent from a year earlier on increased product sales and prices.
Leading gains on the Hang Seng was Li & Fung, which ended the morning session up 5.8 percent after opening down more than 10 percent. Analysts said the volatility was a result of its CEO change and a spin-off plan.
But gains were outweighed by losses led by Want Want China Holdings, which shed 3.2 percent after closing at its highest since May 15 on Wednesday. (Editing by Jacqueline Wong)