* CSI300 +1.2 pct; SSEC +0.8 pct; HSI unchanged
* Low inflation data increases monetary easing hopes
* Volume thin as economic worries sideline investors
SHANGHAI, Feb 10 (Reuters) - Chinese shares gained for a second day on Tuesday as lower-than-expected inflation raised the prospect of further monetary easing, but persistent worries over the economy are keeping many investors on the sidelines.
China's annual consumer inflation hit a five-year low in January while factory deflation deepened, underscoring persistent weakness in the economy.
"This could trigger more easing policies, such as additional cuts in interest rates or reserve ratios, which will give the stock market some support," said Li Feng, a trader at Fortune Securities.
"But if the economy continues to deteriorate, the market will fall further."
The CSI300 index rose 1.2 percent, to 3,386.97 points at the end of the morning session, while the Shanghai Composite Index gained 0.8 percent, to 3,120.97 points.
In Hong Kong, the Hang Seng index was unchanged at 24,526.47 points, while the Hong Kong China Enterprises Index gained 0.5 percent, to 11,707.28.
Banking shares led gains. Shares of brokerages also rose on expectations that the launch of more derivative products such as stock options would improve the sectors' revenue streams.
But reflecting investor caution, trading volume in Shanghai shrunk to the lowest level in nearly three months on Monday, and remained low on Tuesday morning.
"The market is already down 10 percent from its previous peak, but a deserved rebound we see today is much weaker than many had expected," said Du Liang, analyst at Shanxi Securities Co.
In addition to ugly economic data, the gains were also limited by a sluggish overnight performance in global markets and worries over liquidity as 17 companies launch initial public offerings on Tuesday, he added.
And for the week, 24 companies plan to raise an expected 15.2 billion yuan ($2.43 billion). Brokerage BOC International estimates that on Wednesday alone, 1.93 trillion yuan of subscription capital would be locked up.
Signalling further expansion in equity supply, the official China Securities Journal reported on Tuesday that China's securities regulator plans to speed up IPO approvals in the following months, paving the way for the introduction of a registration-based system.
Under the new system, similar to those used in the United States and other developed markets, market players, not regulators, will play a decisive role in determining whether a company can sell shares publicly or not.
New A-share account openings bit.ly/1wvJ9S9
China trading volumes hit records in 2014 link.reuters.com/vag73w
$1 = 6.2441 Chinese yuan Reporting by Samuel Shen and Pete Sweeney; Editing by Jacqueline Wong