* HSI flat, H-shares +0.3 pct, CSI300 +0.7 pct
* China property firms rise on reports of loan rule-relaxing
* Military-related stocks stronger after president’s comments
* CRE slips following a tumble in Tesco shares (Updates to midday)
By Grace Li
HONG KONG, Sept 23 (Reuters) - China shares on Tuesday clawed back some of the previous day’s losses after a preliminary survey showed China’s manufacturing sector unexpectedly picked up in September, while the Hong Kong market hovered near two-month lows.
The HSBC/Markit Flash China Purchasing Managers’ Index (PMI) rose to 50.5 in September from August’s final reading of 50.2, beating a Reuters poll forecast of 50.0.
The Hang Seng Index, which has fallen 10 out of the 12 past sessions, was flat by midday at 23,960.43 points. The China Enterprises Index of the top Chinese listings in Hong Kong was up 0.3 percent.
The CSI300 of the leading Shanghai and Shenzhen A-share listings and the Shanghai Composite Index both added 0.7 percent. The Shanghai benchmark stood at 2,304.89 points. Both closed at their lowest in two months on Monday.
“The flash PMI was better than expected, which helped dispel some over-pessimism about the economy,” said Xiao Shijun, an analyst at Guodu Securities in Beijing.
Chinese property developers were the standout performers early Tuesday, after a report by the official Shanghai Securities News said one of China’s top four state banks plans to ease rules on mortgage lending as the government seeks to bolster the flagging real estate market.
China’s largest residential developer China Vanke climbed 3.6 percent in Hong Kong and 1.2 percent in Shenzhen. Poly Real Estate Group rose 1.3 percent in Shanghai.
Military-related companies, led by shipbuilders, again posted solid gains. Late on Monday, state television reported that President Xi Jinping said the army should build new types of headquarters and strengthen its ability to win a battle, which analysts said boded well for reforms in those firms.
CSSC Holdings jumped 7.4 percent and China Shipbuilding Industry 2.9 percent. The subindex for space and defense stocks climbed 2.6 percent.
Esprit Holdings climbed 3.9 percent ahead of its full-year results due later in the day. Its shares are still down 13.8 percent on the year, compared to a 2.8 percent rise for the Hang Seng Index.
China Resources Enterprise slid 1 percent to its lowest in six months, on concern about its joint venture with supermarket retailer Tesco, whose London shares plunged on Monday following an accounting error that forced it to cut its profit outlook. (Editing by Richard Borsuk)