* CSI300 -1.2 pct; SSEC -1.3 pct; HSI +0.3 pct
* Most sectors fall in China; banks rise on reform hopes
* Hong Kong lawmakers start debate on electoral reform plan
By Samuel Shen and Pete Sweeney
SHANGHAI, June 17 (Reuters) - Chinese investors sold shares across the board on Wednesday morning, as a fresh wave of initial public offerings hit the market at a time of doubts over how much higher it can go after an eight-month bull run.
By midday, the CSI300 index fell 1.2 percent and the Shanghai Composite Index lost 1.3 percent, bringing losses in both indexes this week to more than 6 percent.
Three companies will start taking investor subscriptions for IPOs on Wednesday, with another 22 firms following suit this week. This wave of IPOs is expected to freeze 7 trillion yuan ($1.13 trillion) of capital.
Among them, the IPO by Guotai Junan Securities is the biggest. China's third-largest brokerage by profit said it aims to raise 30.1 billion yuan in what could be the biggest listing since 2010.
The market's ability to absorb accelerated IPO issuance has been weakened by a fresh government crackdown on illegal margin financing. That has promoted some investors to take profit from a market that has surged 140 percent over the past 12 months.
Dacheng Fund Management Co said the correction is natural following the previous "crazy rise" in share prices, but the bull market is not yet over.
"From a strategic perspective, China needs a booming stock market to boost direct financing, lower companies' financing costs, and push ahead with economic restructuring," Dacheng wrote in an emailed statement.
"A good market environment is also necessary ahead of China's planned introduction of a registration-based IPO system."
Despite optimism, the asset manager admitted that in the short term, the correction could be sharp.
On Wednesday, banking was the only sector that managed to end the morning session higher, as the shares drew support from an announcement by Bank of Communications (BoCom) that its mixed-ownership reform plan obtained regulatory approval.
BoCom shares jumped 5.5 percent in Shanghai and 2.8 percent in Hong Kong.
Hong Kong shares performed better than mainland ones, rebounding from a recent correction.
The Hang Seng index added 0.3 percent, to 26,645.29 points and the Hong Kong China Enterprises Index gained 0.1 percent to 13,267.69.
Investors remained cautious, however, ahead of a politically sensitive vote in Hong Kong later this week.
More than 1,000 people converged on Hong Kong's Legislative Council early on Wednesday before lawmakers debate a Beijing-backed electoral reform plan that could trigger fresh protests in the Chinese-controlled city.
$1 = 6.2075 Chinese yuan Editing by Richard Borsuk