* CSI300 +0.1 pct, SSEC +0.4 pct
* HSI +1.23 pct, HSCE +2.9 pct
* Investors shifting from brokerages to banks
* Small cap ChiNext index slides 5 pct
SHANGHAI, Dec 22 (Reuters) - China stocks rose on Monday in a volatile morning session, as investors ploughed funds into electrical utilities shares on hopes of reform, while banks saw a dramatic spike before a sell-off ensued.
The CSI300 index rose 0.1 percent to 3,385.57 points at the end of the morning session. The Shanghai Composite Index gained 0.4 percent to 3,120.85 points, off earlier gains of nearly 2 percent thanks to the CSI300 bank share index of heavyweights, which soared over 8 percent before investors cashed in on the rally.
The rise was led by Bank of China, still up 9.3 percent at the end of the morning session.
"Investors are switching from brokerages to banks on fears that brokerage shares are over-heating," said Chen Xingyu, banks analyst at Phillip Securities (Hong Kong) Ltd.
Others suspected the rally of being a case of continued positioning in advance of expected future monetary easing.
"I think market players still expect a cut in reserve requirement ratio," said Xiao Shijun, analyst at Guodu Securities in Beijing, adding that as a result retail investors were continuing to back blue chips and shed small-caps, as evidenced by a sharp 5 percent slide in the ChiNext growth company index in Shenzhen.
Electric utilities shares also outperformed the broader market after local media reported that China might launch an utility reform scheme by the beginning of 2015. GD Power Development Co and Huadian Power International Co both jumped their 10 percent daily limit.
China CSI300 stock index futures for January fell 1.3 percent, to 3,461.8, a spread of 76.2 points above the current value of the underlying index.
"The sentiment in Hong Kong was a bit poorer than that in China as (Hong Kong investors) didn't follow the rebound in A-shares," said Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong."They now pay more attention to mainland markets."
The H-share index outperformed the Hang Seng index in morning session, thanks to Chinese energy conglomerates listed in Hong Kong. Pang said investors saw limited chance that oil prices would continue to fall.
The Hang Seng index added 1.2 percent to 23,387.28 points.
The Hong Kong China Enterprises Index gained 2.9 percent, to 11,728.52.
The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 124.43, its highest level since 2011.
A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.
Total volume of A shares traded in Shanghai was 45.53 billion shares, while Shenzhen volume was 15.80 billion shares.
Total trading volume of companies included in the HSI index was 1.5 billion shares.
Reporting by Pete Sweeney; Additional reporting by the Engen Tham, Chen Yixin and the Shanghai Newsroom; Editing by Shri Navaratnam