* CSI300 -0.4 pct; SSEC -0.5 pct; HSI -0.5 pct
* Hong Kong market poised to see best week in 10 months
* Thin trading volume suggest investors remain jittery-trader
SHANGHAI, Feb 19 (Reuters) - China and Hong Kong stocks softened on Friday morning, joining a global correction, as a pause in the oil price rally knocked down energy shares amid lingering concerns about the economy.
Still, the China market is on track to have its best week in two months, while Hong Kong is poised to enjoy its best weekly performance in 10 months.
Some analysts suspect the rebound is petering out, as thin trading volumes suggest investors remain jittery amid economic uncertainty.
China’s blue-chip CSI300 index fell 0.4 percent, to 3,041.86 points by lunch break, cutting the week’s gain to 2.6 percent. The Shanghai Composite Index lost 0.5 percent, to 2,849.40 points, but for the week, it is up roughly 3 percent.
In Hong Kong, both the Hang Seng index and the Hong Kong China Enterprises Index edged down 0.6 percent, both on track to see their best weeks since April 2015 with gains of over 5 percent.
This week’s recovery in risk appetite has been underpinned by a broad rebound in global markets following last week’s rout, as a bounce in oil prices bolstered energy and banking shares.
However, Alex Wong, director of asset management at Ample Finance Group in Hong Kong, said that the oil rally is losing momentum, posing renewed risks to global stock markets, including Hong Kong.
“Oil price is a key factor to watch. If oil prices resume sliding, energy and European banking stocks would be vulnerable, triggering renewed volatility in global markets, and hitting Hong Kong stocks,” Wong said.
Commenting on China stocks, Wong said that although the People’s Bank of China’s efforts to stabilise the yuan and improve its communications with the market are positive, the health of the economy remains a concern, despite stimulus hopes.
“We have seen what Beijing did in 2009, which was not effective. More stimulus won’t solve the fundamental problem,” Wong said, referring to China’s 4 trillion yuan ($613.53 billion) investment package unveiled during the 2008/09 global financial crisis.
Most sectors in China fell. Hong Kong shares dropped, with energy shares among the biggest decliners.
Bucking the trend, China Reinsurance Group Corp rose 1.6 percent, after the company estimated its 2015 profit grew roughly 40 percent. ($1 = 6.5196 Chinese yuan)
Samuel Shen and Nathaniel Taplin; Editing by Sam Holmes