September 18, 2014 / 4:51 AM / 3 years ago

China shares rise on strong banks, Hong Kong slips again

* HSI -0.7 pct, H-shares -0.8 pct, CSI300 +0.5 pct

* Citic Bank leads sector gains, tests 4-1/2-month high

* Property developers drop on weak housing data

* Macau casinos recover after hefty losses (Updates to midday)

By Grace Li

HONG KONG, Sept 18 (Reuters) - China shares extended gains on Thursday morning bolstered by a leap in bank and brokerage stocks, while the Hong Kong market dipped back into the red as economic worries prevailed.

At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings rose 0.5 percent, while the Shanghai Composite Index was up 0.4 percent at 2,317.01 points.

The Hang Seng Index slipped 0.7 percent to 24,199.87 points. The China Enterprises Index of the top Chinese listings in Hong Kong fell 0.8 percent.

"For Hong Kong, the negative impact mainly comes from the Chinese economy," said Linus Yip, strategist at First Shanghai Securities. "If mainland China is not doing well, some fund inflows would not be as strong as in previous months...so the Hong Kong market is still in a downtrend."

Property companies were the key under performers on Thursday, after official data showed China home prices fell in August for a fourth straight month, underlining a deepening downtrend in the property market that is increasingly weighing on the broad economy.

Gemdale Corp shed 1.6 percent and Poly Real Estate 0.7 percent in Shanghai. In Hong Kong, China Vanke lost 1.8 percent while some smaller developers slid more than 3 percent.

A surge in shares of China Citic Bank in late morning trade lifted financial stocks, helping the two onshore indexes reverse early losses. Citic Bank was up 5.3 percent by the lunch break, earlier touching its highest since April 30.

"Bank shares were lifted by progress with the issuance of preferred shares and the employee stock ownership plan," said Cao Xuefeng, head of research at Huaxi Securities in Chengdu.

Reports on Wednesday saying China's central bank was injecting a combined 500 billion yuan ($81.4 billion) of liquidity into the country's top banks also indicated authorities were stepping up efforts to shore up a faltering economy.

Bank of Communications spiked 3.5 percent, Minsheng Bank added 1.3 percent, and CITIC Securities gained 1.9 percent.

The beaten-down Macau gambling sector finally saw some money coming in. Galaxy Entertainment Group bounced 3.0 percent from a more than one-year low. Wynn Macau, which had only one winning session in September, put on 3.1 percent.

$1 = 6.1439 Chinese yuan Editing by Jacqueline Wong

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