* CSI300 +1.3 pct; SSEC +1.3 pct; HSI +0.6 pct
* State margin lender reaffirms its support to the stock market
* Telecom operators fall in HK after government calls for fee cuts
SHANGHAI, July 23 (Reuters) - China stocks extended their rebound on Thursday morning, with the Shanghai Composite index set to rise for the sixth consecutive session, led by gains in blue chips.
The Hong Kong market, which has been moving mostly in tandem with its mainland counterpart, also gained by midday.
Sentiment among Chinese investors was lifted, after China Securities Finance Corp, the state margin lender tasked with propping up wobbly share prices, told state media on Thursday that it would continue to support the market, while denying it had sold shares in certain companies.
The CSI300 index rose 1.3 percent, to 4,212.45 points at the end of the morning session, while the Shanghai Composite Index also gained 1.3 percent, to 4,078.90 points.
The market continued to experience relatively low volatility, offering further signs that government bailout measures -- including the setup of a bailout fund, a ban on share sales by major shareholders, and restrictions on short selling activities -- have finally calmed investors.
“The key takeaway remains the normalization of the overall market,” said Gerry Alfonso, director of Shenwen Hongyuan Securities.
But China’s unconventional measures to end the market’s free fall is not without controversy.
The International Monetary Fund (IMF) has told China about its concern over investors’ ability to enter or leave Chinese financial markets as they wish, sources with direct knowledge of the matter told Reuters.
Stocks in China rose across the board.
Shenzhen’s start-up board ChiNext continued to rebound, while big caps, including banks and major brokerages and real estate firms also rebounded, following days of weakness.
Shares of Chinese CRRC Corp Ltd rose in both Shanghai and Hong Kong, after the train maker announced it won a 4.84 billion yuan ($779 million) order from Hong Kong transportation company MTR Corp, its biggest-ever domestic metropolitan train contract.
In Hong Kong, the Hang Seng index added 0.6 percent, to 25,438.89 points, while the Hong Kong China Enterprises Index gained 1.0 percent, to 11,847.58.
Most sectors, including financials, property and information technology rose, but the telecom subindex fell, led by China’s three telecom giants.
China Mobile, China Telecom and China Unicom fell, after the Chinese government ordered the three telecom operators to complete broadband fee cuts by the end of October. (Samuel Shen and Pete Sweeney; Editing by Simon Cameron-Moore)