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SHANGHAI, Oct 8 (Reuters) - China stocks jumped around 4 percent on Thursday as they caught up to a rebound in global markets after a week-long holiday, but traders said the "risk-on" mood would soon be put to the test ahead of earnings reports and a slew of economic data.
Highlighting the fragility of recent gains, investors took profits on Hong Kong shares which had jumped 8 percent during China's "Golden Week," sending the city's benchmark indexes lower.
China's CSI300 index rose 4.1 percent to 3,333.24 points by the end of the morning session, while the Shanghai Composite Index gained 3.8 percent to 3,167.79, but they still remained nearly 40 percent below their mid-June highs.
"Chinese shares got a boost from the global market, especially the U.S. market," said Xiao Shijun, an analyst at Guodu Securities in Beijing.
While Chinese markets were closed for the Oct 1-7 National Day holiday, the Dow Jones Industrial Average rose nearly 4 percent while global oil prices also enjoyed a robust rebound, boosting shares of resource companies.
But traders said the euphoria could be short lived, with Ningxia Xinri Hengli Steel Wire Co set to become the first Shanghai-listed firm to publish third-quarter earnings on Friday.
While China's army of retail investors do not react as often or as quickly to earnings reports as those in developed markets, traders are bracing for bad news.
Data last month showed profits earned by Chinese industrial companies declined at the sharpest rate in four years in August as costs kept rising and product prices kept falling, adding to signs of weakness in the world's second-largest economy.
A slew of economic indicators, including September data and third-quarter GDP, also will be released over the coming weeks, and will be scoured for any clues on whether the economy is starting to bottom out or continuing to cool.
On Tuesday, the International Monetary Fund cut its global growth forecasts for a second time this year, citing weak commodity prices and a slowdown in China.
Chinese stocks rose across the board, with the CSI300 IT Index <.CSI300 IT> leading the gain with a 6.5 percent jump.
The CSI300 Health Care Index was also up sharply, rising over 5 percent, after the government said that it would invest 9.8 billion yuan ($1.54 billion) to subsidize public hospital reform next year.
The rise in the sector was also aided by news that Chinese medical scientist Tu Youyou became the first Nobel laureate in medicine, prompting a batch of Chinese herbal medicine makers, including Conba, Zhongxin Pharmaceutical and Baiyunshan to jump their 10 percent daily limit.
In Hong Kong, the Hang Seng index dropped 0.7 percent to 22,360.63, while the Hong Kong China Enterprises Index lost 1.2 percent to 10,275.58.
Most sectors fell, with the energy sector leading the decline.
But Geely Auto bucked the trend, rising 1 percent to HK$4, after Barclays raised its price target for the Chinese automaker by 21 percent to HK$4.10 following strong September sales.
Shares in movie theatre equipment maker IMAX China Holding Inc and lingerie manufacturer Regina Miracle International (Holdings) Ltd rose on their stock market debuts on Thursday after they raised a combined $460 million in their initial public offerings.
Reporting by the Shanghai Newsroom and Samuel Shen and Kazunori Takada; Editing by Kim Coghill