* CSI300 +0.5 pct; SSEC +0.3 pct; His +0.3 pct
* China's rate cut within expectations, partly priced in - analysts
* Property, utility, clean tech stocks up
* Banks down on profitability worries due to cut
By Samuel Shen and Pete Sweeney
SHANGHAI, March 2 (Reuters) - China stocks posted modest gains on Monday after the central bank cut interest rates over the weekend, with some investors expressing disappointment that it didn't cut rates more deeply.
The People's Bank of China cut interest rates for the second time in just over three months late on Saturday as the government steps up efforts to support the slowing economy amid the mounting threat of deflation.
While the previous rate cut in late November triggered a 26 percent surge in Chinese shares over the following month, investors appeared less excited this time around. Aggressive policy easing had been expected this year after the economy recorded its slowest growth in 24 years in 2014.
"It's not a surprise," said Wu Kan, head of equity trading at investment firm Shanshan Finance in Shanghai. "It's a slow bull (market) now, not the kind of crazy bull we saw last year."
The CSI300 index ended the morning up 0.5 percent at 3,589.97 points, while the Shanghai Composite Index edged up 0.3 percent to 3,319.08, having at one point crossed into negative territory.
The Hang Seng index also moved sideways for the most part, adding only 0.3 percent to 24,885.35 points, while the Hong Kong China Enterprises Index gained 0.6 percent.
"The timing of the rate cut is within market expectations, but the strength of the cut is slightly less than anticipated," Dacheng Fund Management Co Ltd said in a note to clients, adding that some investors had expected a 50-basis point reduction, rather than the 25 basis point cut announced on Saturday.
"The impact of the latest rate cut is expected to be blunt, and the reaction, from both the economy and the stock market, wouldn't be as vehement as the last time."
Indeed, the market may have already priced in expectations of further monetary easing. China's main stock indexes staged a seven-day rally ahead of the Lunar New Year holiday and continued rising last week.
The weekend policy move gave an immediate boost to shares of highly-leveraged sectors, including real estate and utilities, that investors hope will benefit from the ability to refinance at the new lower benchmark rates.
The Shanghai Property Index rose 0.1 percent, while an index that tracks China's biggest utility firms gained 0.8 percent.
But banking shares quickly erased early gains as some analysts say the rate cut would trim lenders' profits. The CSI300 Bank Index was down 0.5 percent at midday. (Editing by Kim Coghill)