* Utilities buck Hong Kong's downward trend
* China market rises as energy giants gain ground (Updates to midday)
HONG KONG/SHANGHAI, Dec 30 (Reuters) - Hong Kong shares were down 0.51 percent by midday Wednesday with Chinese banks and insurers leading losses. China stocks rose on optimism over the country's economic recovery and as energy giants gained.
The benchmark Hang Seng Indexextended early losses to a fall of 109.96 points to 21,389.48 by the midday break. The China Enterprises Index of top locally listed mainland Chinese stocks was down 1.49 percent at 12,456.56.
"People were cautious and their confidence was weakened after chief executive's comment on the Hong Kong economy," said Alfred Chan, chief dealer at Cheer Pearl Investment.
On Tuesday, Chief Executive Donald Tsang said in Beijing that he was pessimistic about the pace of economic recovery in Hong Kong and warned that the city might experience a "double dip" in middle of next year and recovery might not proceed smoothly.
Brokers said underlying sentiment was not that weak and investors were advised to stay alert.
Chinese insurers and banks were weak on concern over their exposure to policy risk and further Chinese government measures to temper asset bubbles. China Lifefell 1.32 percent to HK$37.35 and China Pacific Insurance was down 1.47 percent at HK$30.25.
Bank of Communicationsshed 1.46 percent and ICBC fell 1.56 percent. Bank of Communications said it would appoint an executive from ICBC to a senior position, as part of a more general reshuffle of senior executives among China's largest state-owned banks. [ID:nTOE5BT01U]
China Construction Bankfell 1.52 percent to HK$6.46. ING will sell its 50 percent stake in Chinese insurer Antai to China Construction Bank as part of its ongoing restructuring programme. [ID:nLDE5BS09I]
PetroChinawas down 1.93 percent at HK$9.16 despite Canada approving on Tuesday PetroChina's bid for control of two oil sands projects. The deal was scrutinised under recently tightened rules for takeovers of strategic assets by foreign state-controlled companies. [ID:nN29197881]
Bucking the weak market, utilities rose as traders parked their funds in the defensive sector. China Resources Powerclimbed 2.4 percent to a four-week high before settling at HK$15.10, up 1.21 percent.
CLP Holdingsgained 0.19 percent and Hongkong Electric was up 0.24 percent.
Market turnover increased slightly to HK$24.08 billion ($3.1 billion) from midday Tuesday's HK$18.63 billion.
Kaisa Groupclimbed 11.1 percent to a two-week high of HK$3.10 before settling at HK$2.96, up 6.09 percent. The Chinese developer said it would team up with Shenzhen-headquartered Sino Life Insurance to explore investment opportunities in commercial properties for five years.
Chinese comb maker Carpenter Tanextended gains, soaring 23.4 percent to a high of HK$4.85 before ending the morning at HK$4.61, up 17.3 percent. On its Tuesday debut, the stock jumped 52.3 percent from its issue price, the market's third-best debut this year after Amber Energy and BBMG .
Geely Autofell 0.97 percent to HK$4.10. Executive director Lawrence Ang sold an aggregate four million Geely shares at an average HK$4.365 and HK$4.435 each on Dec. 14 and 15, respectively, according to a filing to the stock exchange.
SHANGHAI RISES AS ENERGY GIANTS UP
China's key stock index was up 1.05 percent by midday, led by energy giants riding the global oil price rally of recent weeks, while institutional investors indulged in window-dressing to bolster their year-end performance.
Upbeat expectations for economic recovery and corporate earnings continued to support sentiment.
The benchmark Shanghai Composite Indexended the morning at 3,245.325 points, extending a more than 2 percent gain earlier in the week fuelled partly by a government pledge to stick with its economic stimulus. [ID:nTOE5BR00F]
Gaining Shanghai A shares prevailed over losers by 617 to 244 while turnover jumped to 80 billion yuan ($12 billion) from Tuesday morning's 63 billion yuan.
Asia's top refinery Sinopec Corp, one of the morning's most actively traded stocks, rose 3.28 percent to 14.16 yuan, while China's top oil company PetroChina added 1.7 percent to 13.78 yuan.
Oil prices have generally risen over the past two weeks on cold U.S. weather and a fall in U.S. inventories, although they traded lower on Wednesday, drifting away from $80 per barrel.
"(Chinese) institutions typically buy in the final days of the year to make the book value of their stock holdings look better by the year-end," said a senior trader at a major Chinese securities brokerage in Shanghai. "This year, they have a particularly good reason for year-end window-dressing as most investors are already bullish about the stock market's prospects for the first quarter of next year."
The official China Securities Journal on Wednesday quoted analysts as forecasting that the key index might rise as high as 4,000 points next year, buoyed by China's economic recovery.
The official Securities Times reported that new regulations on calculating insurer earnings, due to take effect next year, would give a boost to the company bottom lines.
Ping An Insurancerose 3.17 percent to 54.00 yuan while bigger rival China Life Insurance advanced 1.57 percent to 30.97 yuan.
Fuyao Glass, China's top auto glass maker, forecast on Wednesday that its earnings would jump more than 330 percent in 2009 from 2008, propelled by strong vehicle sales in China, which replaced the United States as the world's largest auto market this year.
But Fuyao was down 1.75 percent at 14.56 yuan by midday under heavy profit-taking pressure after more than tripling over the past year, far outperforming the broad market on investor optimism about China's auto industry. (Editing by Chris Lewis)
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