* Trading volumes high as retail investors chase gains
* Treasury futures fall as risk appetite improves
SHANGHAI, July 7 (Reuters) - A Chinese share rally extended into its sixth day on Tuesday, as retail investors rushed to join an officially sanctioned bull market, but stocks in Hong Kong paused as investors consolidated gains.
By the midday break, the Shanghai Composite Index was 1.32% higher and blue-chip shares added 1.82%. Both pulled back from earlier gains of more than 2% as analysts drew parallels with a stock market boom-and-bust in 2015.
The Shanghai index had its best day in nearly five years on Monday after an editorial in the official China Securities Journal said China needs further share market gains to fund a rapidly developing digital economy.
Financial shares, which had risen 9% on Monday, were able to only eke out a further 0.38% gain on Tuesday morning, but analysts said the broader rises could continue.
“The current rally, sanctioned by the authorities in the media, is so far small beer compared to past upswings. Although it may ultimately prove unsustainable, a day of reckoning could be some way off,” Oliver Jones, an analyst at Capital Economics, wrote in a note.
Trading activity was frenetic, with about 42.75 billion shares traded on the Shanghai exchange, compared with a 30-day moving average of 25.45 billion shares a day.
The smaller Shenzhen index jumped 2.51% and the start-up ChiNext Composite index soared 3.27% by midday.
Investor enthusiasm was more tepid in Hong Kong with the Hang Seng index up just 0.12% at midday, after earlier rising as much as 1.68%. Chinese H-shares listed in Hong Kong rose 0.3%.
The yuan was quoted at 7.0165 per U.S. dollar, 0.04% firmer than the previous close of 7.0194.
Rising risk appetite pushed bond prices lower. Benchmark Chinese 10-year treasury futures for September delivery, the most-traded contract, dipped 0.26% by midday. (Reporting by Andrew Galbraith; Editing by Jacqueline Wong)