* SSEC 1.2 pct, CSI300 1.4 pct, HSI 0.7 pct
* PBOC governor comments lift stocks after Friday slump
* Developers fall as Beijing prepares draft property tax law
SHANGHAI, March 11 (Reuters) - Shares in China rebounded on Monday morning after tumbling in the previous session, as the country’s central bank pledged to further support the slowing economy by spurring loans and lowering borrowing costs. ** At the midday break, the Shanghai Composite index was up 1.22 percent at 3,006.19, after plunging 4.4 percent on Friday. China’s blue-chip CSI300 index was up 1.39 percent, recovering from a 4 percent drop on Friday. ** Gains were driven by statements from People’s Bank of China (PBOC) Governor Yi Gang, who said on Sunday that the PBOC’s “prudent” monetary policy will emphasise counter-cyclical adjustments, using a phrase that implies the need to fight an economic slowdown.
** Yi said there is still some room for the PBOC to cut reserve requirement ratios, and said the bank will work on lowering risk premiums that have kept lending rates for small firms relatively elevated. ** Chinese banks made 885.8 billion yuan ($131.77 billion) in net new yuan loans in February, down sharply from a record 3.23 trillion yuan in January, though the drop was likely due to seasonal factors. ** “Considering that the main external central banks are all turning toward loosening, and that domestic credit growth still requires government support, monetary policy will continue to be relatively loose,” analysts at Zheshang Securities said in a note. The analysts said that weakness in loan data indicates that companies have weak interest in expanding production or investment. ** But property developers bucked the broader trend to finish the morning lower after official said work on a draft property tax law is “steadily advancing” and will be submitted for review when conditions are right. Top developer China Vanke ended the morning down 0.88 percent after earlier falling as much as 3.8 percent. ** Chinese H-shares listed in Hong Kong rose 0.82 percent at 11,248.59, while the Hang Seng Index was up 0.69 percent at 28,422.15. ** The smaller Shenzhen index was up 2.38 percent and the start-up board ChiNext Composite index was higher by 2.94 percent. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.40 percent while Japan’s Nikkei index was up 0.56 percent. ** The yuan was quoted at 6.7225 per U.S. dollar, 0.04 percent weaker than the previous close of 6.72. ** The largest percentage gainers in the main Shanghai Composite index were Ningbo Zhoushan Port Co Ltd, up 10.1 percent, followed by BAOSHENG SCIENCE AND TECHNOLOGY INNOVATION CO LTD, gaining 10.09 percent and Guizhou Changzheng Tiancheng Holding Co Ltd, up by 10.09 percent. ** The largest percentage losses in the Shanghai index were Shanghai DZH Ltd, down 10.02 percent, followed by Hualing Xingma Automobile Group Co Ltd, losing 9.96 percent and People’s Insurance Company Group of China Ltd , down by 9.87 percent. ** So far this year, the Shanghai stock index is up 19.09 percent, while China’s H-share index is up 10.2 percent. Shanghai stocks have risen 0.98 percent this month. ** The top gainers among H-shares were Huatai Securities Co Ltd , up 3.22 percent, followed by China Telecom Corp Ltd , gaining 3.19 percent and SINOPHARM GROUP CO LTD , up by 2.9 percent. ** The three biggest H-shares percentage decliners were Guangzhou Automobile Group Co Ltd, which has fallen 2.00 percent, CNOOC Ltd, which has lost 1.0 percent and Dongfeng Motor Group Co Ltd, down by 0.9 percent. ** In Hong Kong, the sub-index of the Hang Seng index tracking energy shares rose 0.1 percent while the IT sector rose 2.4 percent. The top gainer on the Hang Seng was Sino Biopharmaceutical Ltd, up 3.51 percent, while the biggest loser was Geely Automobile Holdings Ltd, which was down 1.70 percent.
Reporting by Andrew Galbraith; Editing by Rashmi Aich