* CSI300 +2.1 pct; SSEC +1.6 pct; HSI +2.5 pct
* $3.7 bln worth of net inflows into Shanghai stocks this week
* Goldman say concerns seem quite well priced in Chinese equities
SHANGHAI, Aug 27 (Reuters) - China stocks rose on Thursday as a strong rally on Wall Street helped calm shaky global markets, prompting Chinese and foreign investors to hunt for bargains after a 20 percent plunge over the past week.
But traders said the market remained vulnerable to sudden selloffs, as investors who bought shares using margin financing continue to deleverage.
Sentiment also remains fragile as investors wait to see if Beijing can pull the world's second-biggest economy out of its slowdown.
The flagship Shanghai Composite Index rose as much 3 percent in early trade but ended the morning up 1.6 percent, near where it was at the open.
The index briefly topped the key technical level of 3,000 points, but last traded at 2,972.57 points, suggesting the previous support level may have turned into a line of resistance.
The blue-chip CSI300 index rose 2.1 percent, to 3,089.38 points, also paring some of its early gains.
Hong Kong stocks also rebounded sharply, with the benchmark Hang Seng Index up 2.5 percent at lunch time.
Wall Street rallied nearly 4 percent overnight, easing fears of a deep and protracted global market rout after a heavy selloff earlier in the week, sparked in part by worries about China's cooling economy and plunging stock markets.
Sentiment was aided by comments from New York Fed President William Dudley on Wednesday who said the prospect of a September rate hike "seems less compelling" than it was only weeks ago.
"From today, I'm no longer pessimistic," Jiang Chao, a strategist at Haitong Securities, who correctly predicted China's stellar bull run which ended in mid-June, wrote on Thursday.
He predicted that China's central bank will cut interest rates further, which would make stocks attractive again, given their depressed valuation after the recent crash.
There are signs some foreign investors are eyeing valuations of China's blue chips.
Over the last three days, 23.8 billion yuan ($3.71 billion) of net inflows was seen flowing into Shanghai-listed shares via the Shanghai-Hong Kong Stock Connect Scheme, a spike from last week, when the daily quota was barely used.
Nearly all major sectors in China were up on Thursday, with healthcare and infrastructure shares taking the lead.
However, trading remained volatile, which some analysts attributed to ongoing "deleveraging" among increasingly wary Chinese investors.
Outstanding margin loans - money investors borrow to buy stocks - stood at 1.16 trillion yuan ($181.07 billion) as of Tuesday, a 7 percent drop from the previous day, and representing the sixth consecutive session of declines.
In Hong Kong, the Hang Seng index added 2.5 percent to 21,613.48 points, while the Hong Kong China Enterprises Index gained 3.4 percent to 9,750.14.
Goldman Sachs said in its latest strategy report that China remains in a comfortable position compared with other Asian emerging markets, and concerns about China's economy "seem quite well priced in Chinese equities." (Samuel Shen and Pete Sweeney; Editing by Kim Coghill)