China, Hong Kong stocks rise, banks surge on local govt debt scheme
* CSI300 +1.4 pct; SSEC +1.4 pct; HSI +0.4 pct;
* Banks surge on local govt's debt swap plans
* Bad economic data fan policy easing hopes
SHANGHAI, March 12 (Reuters) - China stocks rose on Thursday, fuelled by a surge in banking shares as investors expect lenders and the economy to benefit from Beijing's plans to let local governments swap out expensive debt, easing their massive debt burdens.
The market also rose on hopes that China will step up monetary easing to aid the slowing economy.
Both the CSI300 index and the Shanghai Composite Index rose 1.4 percent at the end of the morning session, with the CSI300 banking index jumping more than 5 percent to its highest level in six weeks.
Hong Kong's main stock indices also rose, helped by gains in mainland banks listed in the city.
The Hang Seng index added 0.4 percent, while the Hong Kong China Enterprises Index gained 1.6 percent.
China has unveiled plans to exchange local governments' high-interest maturing debt for low interest municipal or provincial bonds, with speculation swirling that the government would directly purchase bonds from local government financing vehicles (LGFVs), which would constitute a form of quantitative easing. Continuación...