* CSI300 flat; SSEC +0.3 pct; HSI +0.3 pct
* Policy easing fully priced in; investors focus on stock picks
* Telecom stocks jump on policy support; steel shares fall
By Samuel Shen and Kazunori Takada
SHANGHAI, May 14 (Reuters) - Telecom stocks in China rose on Thursday after Beijing said it planned to accelerate development of high speed broadband networks, while heavy industries slipped on further evidence of slowing economic momentum.
China's money supply grew at its slowest pace on record and investment growth sank to its lowest in nearly 15 years, data for April showed on Wednesday, building the case for further policy easing.
Optimism of more government stimulus to prop up flagging growth can no longer excite the market as easing has been priced in, said Chen Zhizhong, Shenzhen-based analyst at China Merchant Securities.
"The market has already priced in additional cuts in interest rates and reserve ratios this year. The opportunity now is structural," said Chen, who expects growth stocks and blue chips to take turns winning investor favour.
The CSI300 index was unchanged at 4,720.36 points at the end of a choppy morning session, while the Shanghai Composite Index gained 0.3 percent, to 4,387.33 points.
Hong Kong markets were mixed with the Hang Seng index adding 0.3 percent, to 27,330.7 points, but the Hong Kong China Enterprises Index slipping 0.2 percent, to 13,836.33.
Merchant Securities' Chen said that the recent turmoil in global bond markets, as well as relatively high valuations of some Hong Kong stocks following April's market surge have reduced appetite for some global investors.
"Foreign investors appear to be retreating, which is why you see trading volume shirinking."
In China, telecom stocks captured the spotlight, buoyed by the government's plans to accelerate development of the country's high-speed broadband networks to raise Internet speeds and cut prices.
Chinese media reported that work to improve China's Internet infrastructure could spur over 100 billion yuan ($16.12 billion) of investment this year, potentially benefiting equipment makers such as privately-held Huawei Technologies Co Ltd and ZTE Corp, which gained 3 percent by midday.
But steel makers, including Baoshan Steel and Hebei Steel tanked on a gloomy industry outlook.
China's steel consumption will likely fall by 6 percent this year on weak demand, Wang Liqun, vice chairman of the China Iron and Steel Association said on Thursday.
The steel sector is "arguably not only exposed to a slowdown in the property sector but also have structural historical issues," Gerry Alfonso, director of Shenwan Hongyuan Securities Co wrote.
Banking shares rose slightly, as investors digested a series of fresh policies that could impact the sector's growth prospects.
While banks' margins are being squeezed by the latest interest cuts, and a government municipal bonds-for-debt swap scheme aimed at shifting some of the financing costs of local governments back to lenders, some analysts see improvement in lenders' asset quality. (Editing by Jacqueline Wong)