(Updates to midday)
* HSI +1.0 pct, H-shares +0.4 pct, CSI300 -0.1 pct
* Alibaba buys stake in Wasu Media, its second firm in two days
* Casino stocks swing back into positive territory
By Natalie Thomas
SHANGHAI, April 9 Hong Kong shares extended gains from the previous day on increases in Tencent and casino shares as well as modest rises in mainland banking stocks, sending the Hang Seng Index to its highest intraday level since February.
Mainland shares had a mixed morning, as investors cashed in on the previous day's gains, after the banking sub-index closed up at its highest level since Dec. 19.
By midday, the Hang Seng Index was up 1.0 percent at 22,825.4 points, its highest level since Feb. 28. The China Enterprises Index of the top Chinese listings in Hong Kong gained 0.4 percent.
The CSI300 index of the largest Shanghai and Shenzhen A-share listings was down 0.1 percent, while the Shanghai Composite Index was up 0.1 percent at 2,100.89 points.
Hong Kong casino stocks began to climb back into positive territory, putting an end to a downward spin many had fallen into in recent days after peaking at the beginning of the month on positive gambling revenue data from Macao.
Wynn Macau Ltd, Galaxy Entertainment Group Ltd , and Sands China Ltd were all up 2.8 percent by the lunch break.
Shares in Tencent, a dominating force on the Hang Seng, were also up in morning trade, gaining 2.5 percent as the stock continued to see-saw on continuing investor concerns about the over-valuation of tech shares.
"Overall what we've seen is that Tencent has boosted the market sentiment, as well as other big cap stocks like the Chinese banking and insurance players," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong.
Yip said he expected gains in HK-listed mainland banking shares and property stocks would continue to lend support to Hong Kong shares throughout April.
On the mainland, banks were the biggest drag after investors cashed in gains from Tuesday's excitement over preferred shares that saw Industrial Bank Co Ltd, China Minsheng Banking Corp Ltd and Ping An bank Co Ltd jump more than four percent.
Industrial Bank slid 1.1 percent in morning trade, while Minsheng and Ping An shed 0.5 and 0.4, respectively.
Though not listed, Alibaba IPO-ALIB.N continued to have an impact on mainland markets, snapping up its second firm in as many days ahead of its U.S. IPO.
Shares in Shenzhen-listed Wasu Media Holding Co Ltd surged 10 percent, the daily trading limit, after it said Alibaba founder Jack Ma and other partners had agreed to buy a 20 percent stake in the firm for $1.05 billion.
On Tuesday, Ma announced he would take a 3.3 billion yuan ($48.41 million) stake in the financial software firm Hundsun Technologies, sending the stock up 10 percent on Tuesday, and another 10 percent on Wednesday.
Shares in Hong Kong listed Russian aluminium giant Rusal jumped 6.2 percent after lenders to the world's largest aluminium producer agreed not to take action against it on any defaults for up to three months.
But Pacific Century Premium Developments saw its shares tumble 15.17 percent to their lowest level since July 2012 after the property firm announced it would sell its office and retail complex Beijing Pacific Century Place for HK$7.2 billion ($928.44 million).
The firm also announced it would be exploring ways to expand its shareholder base in filings to the Hong Kong stock exchange. ($1 = 6.1968 Chinese Yuan) ($1 = 7.7550 Hong Kong Dollars) (Editing by Jacqueline Wong)