* HSI +0.1 pct, H-shares -0.1 pct, CSI300 +0.4 pct
* Time to rotate into laggard cyclicals - strategist
* Belle gains on reported new measures to lift consumption
* Citic Securities at a record high
By Clement Tan
HONG KONG, Dec 28 (Reuters) - Mainland Chinese shares extended gains on the week on Friday, while Hong Kong hovered at 17-month highs, with investors rotating into Chinese non-financial counters after official news reports raised hopes of quicker sector reforms in the new year.
But gains came in weak volumes in both markets with benchmark indexes moving in recent ranges, suggesting the rally powered by China growth-related plays in December is running out of steam as the year winds to a close.
The Hang Seng Index went into the midday trading break up 0.1 percent at 22,630.4, hovering at its highest since Aug 1, 2011. It was up 0.6 percent on the week and 22.8 percent for 2012.
The China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.1 percent as investors took profit on the outperforming railway sector, but is up 0.9 percent on the week and 14.1 percent on the year.
The CSI300 of the top Shanghai and Shenzhen listings rose 0.4 percent, while the Shanghai Composite Index edged up 0.3 percent. They were set for their fourth-straight weekly gains, being up 3.5 and 2.8 percent respectively this week.
The Shanghai Composite Index joined the CSI300 in positive territory on the year earlier this week. The Shanghai index is now up 0.3 percent in 2012, while the CSI300 is up 4.7 percent.
"It might be better for people to leave the good quality names with strong thematic stories for a while in January and start screening for cyclical names that have lagged the rally in December," said Hong Hao, chief equity strategist at Bank of Communications International Securities.
On Thursday, Chinese non-banking financial counters were broadly stronger after China's central bank pledged to quicken the pace of reforming and opening up the sector in 2013, while preventing systemic risks.
Citic Securities jumped 5.4 percent to a record high in Hong Kong since its October 2011 debut and is now up 42.9 percent in 2012. In Shanghai, Citic climbed 1.1 percent and is now up 27 percent for the year.
The People's Bank of China also said it will make its policies more flexible and pre-emptive, while continuing with a "prudent" monetary policy position.
The official Shanghai Securities News reported on Friday that the China Securities Regulatory Commission is working on details to guide domestic companies to list in Hong Kong by lowering listing requirement and allowing them to issue corporate bonds to ease pressure on domestic A-share market.
Shares of Belle International, a leading China-focused footwear retailer, gained 2.7 percent after the state-run China Securities Journal newspaper reported that Beijing could introduce new measures to boost consumption ahead of the annual party congress in March.
Gains on Friday helped Belle test its highest intra-day levels since August 2011. Currently trading at HK$16.82, it is not far from its record high of HK$17.54, which was set in July 2011.
Belle is now up 24.2 percent for the year, but is still trading at an 8 percent discount to its historical 12-month forward earnings multiple, according to Thomson Reuters StarMine.
Chinese automakers were also stronger after the sector was cited in the China Securities Journal report as possible policy reform beneficiaries.
SAIC Motor rose 3.1 percent in Shanghai. Warren Buffett-backed BYD Co Ltd jumped 3.9 percent in Hong Kong and 2.9 percent in Shenzhen.