SHANGHAI, March 2 (Reuters) - China stocks were up in volatile trade on Monday morning after the country's central bank cut benchmark interest rates over the weekend, with property stocks rising and banking shares giving up early gains.
Benchmark indexes opened up, and then seesawed between positive and negative territories in a short space of time
The People's Bank of China cut interest rates for the second time in over three months as the government steps up efforts to support a slowing economy amid the mounting threat of deflation.
The CSI300 index rose 0.5 percent, to 3,589.97 points at the end of the morning session, while the Shanghai Composite Index gained 0.3 percent, to 3,319.08 points.
China CSI300 stock index futures for March rose 0.5 percent, to 3,607.4, 17.43 points above the current value of the underlying index.
The Hang Seng index added 0.2 percent, to 24,878.64 points.
The Hong Kong China Enterprises Index gained 0.8 percent, to 12,279.55.
However, investors appeared to have anticipated the cut the previous week, with the CSI300 rising 1.4 percent for the week while the SSEC gained 2 percent, which analysts at the time attributed to expectations of further easing that were duly fulfilled on Saturday.
The Shanghai Property Index rose nearly 0.5 percent as investors bet interest rate cuts would reduce developers' financing costs and increase demand for home purchases.
However, banking shares quickly erased early gains as some analysts say the rate cut would trim lenders' profit. The CSI300 Bank Index was down around 0.5 percent in early trading.
Samuel Shen and Pete Sweeney; Editing by Shri Navaratnam