* CSI300 +0.6 pct, SSEC +0.5 pct
* Property stocks decline on house price deflation worries
* Rail shares increase on further investment plans
By Natalie Thomas
BEIJING, May 6 (Reuters) - China shares steadied on Tuesday, with gains limited by weakness in the property sector as investors braced for any signs of financial distress among developers as the market cools.
By midday, the CSI300 index of the largest Shanghai and Shenzhen A-share listings was up 0.6 percent, while the Shanghai Composite Index edged 0.5 percent higher to 2,036.83 points.
The CSI300 real estate index continued to underperform, down 0.1 percent by the lunch break, even after Chinese media reported that Tongling in Anhui Province was the fifth city to introduce measures to prop up the property market.
Financial Street Holdings Co Ltd was the biggest drain on the sub-index, down 7.9 percent after the firm said it expected its net profit to decrease between 30 and 50 percent over the first half of 2014.
But other major losers from Monday’s deeper sell-off regained ground. China Vanke Co Ltd was up 1.0 percent, while Beijing Urban Construction and Investment Co Ltd gained 1.8 percent.
Investors continued to buy up rail stocks after Chinese media reported further infrastructure plans, this time financed by local governments for intercity rail expansion projects.
China Railway Construction Corp Ltd jumped 2.2 percent, while China Railway Group Ltd gained 0.8 percent.
One of the day’s biggest winners was struggling steel producer Inner Mongolia BaoTou Steel Union Co Ltd, which saw its share price jump 6.9 percent after it acquired rare earth assets from its parent company Baogang Group as part of plans to focus more on rare earth production.
The Hong Kong stock exchange was closed on Tuesday for a holiday to mark the Buddha’s birthday and will resume trading on Wednesday, May 7. (Editing by Jacqueline Wong)