* HSI +0.4 pct, H-shares + 1.2 pct, CSI300 +2.2 pct
* Financials, insurance firms get boost after China GDP
* Upward momentum seen limited as locked-up shares hit mkt
* Clean energy, telecoms strong on government policy
By Yimou Lee
HONG KONG, July 15 (Reuters) - China shares extended recent gains on Monday, lending support to Hong Kong stocks, as worries about a potentially sharp slowdown in China eased after GDP data was in line with expectations.
China’s growth slowed in the second quarter to an annual 7.5 percent from 7.7 percent in the first quarter as weak overseas demand weighed on output and investment, testing Beijing’s resolve to keep up with reforms in the world’s second-biggest economy.
By midday, the CSI300 was up 2.2 percent, while the Shanghai Composite Index gained 1.5 percent to 2,069.34 points. The CSI300 has now bounced 7 percent and the Shanghai Composite 6 percent from their respective intra-day lows on June 26, which were their lowest since January 2009.
The Hang Seng Index gained 0.4 percent to 21,368.83 points. The China Enterprises Index of the top Chinese listings in Hong Kong rose 1.2 percent.
“It will ease investors’ worries about a sharp decline in the Chinese economy, but you can’t expect the government will do anything special for the time being,” said Ben Kwong, chief operating officer at KGI Asia.
“The market will take a breather after its recent rebound. Under the consolidation mode, traders will just focus on individual, news-driven stocks,” he said, referring to recent outperformers such as information technology and clean energy plays.
The latest economic growth reading matched the median forecast in a Reuters poll of 7.5 percent but there is a growing consensus that China’s economy will continue to slow.
Other data released alongside GDP showed industrial output grew 8.9 percent in June from a year ago, versus expectations of 9.1 percent in the Reuters poll. Retail sales in June rose an annual 13.3 percent versus an expected 12.9 percent.
China’s financial and insurance sectors were robust. In Shanghai, Haitong Securities rose 6.5 percent to a one-month high, while Citic Bank spiked 6.7 percent, set for its best day in almost four months.
Ping An Insurance rose 2.8 percent in Shanghai and 1.4 percent in Hong Kong.
But analysts said upward momentum in the A-share market will be limited as shares, previously locked-up, begin to trade.
The official Xinhua news agency reported on Sunday that China’s stock markets will see 673.7 billion yuan ($109.77 billion) in locked-up shares become eligible for trade this week, the highest weekly value this year.
China’s clean energy and telecommunications sectors were boosted by Beijing’s latest plans to speed up the development of energy-savings and to encourage private investment in the telecoms industry.
In Hong Kong, China Lougyuan rose 4.1 percent to its highest since June 2011, while GCL-Poly Energy gained 2.9 percent.
China’s Tencent rose 3.9 percent to its highest on record, while China Unicom gained 0.8 percent.