* HSI +0.4 pct, H-shares +0.8 pct, CSI300 +0.6 pct
* H-shares hit two-month high
* ICBC A-share at highest since Dec, due to eased monetary policy (Updates to midday)
By Grace Li and Lu Jianxin
HONG KONG/Shanghai, June 10 (Reuters) - China shares ended a choppy morning trade up on Tuesday, led by strong gains in financial counters after China detailed which banks would benefit from a recent cut of required reserves ratios.
The move to boost liquidity helped offset a negative impact from the resumption of initial public offerings (IPOs) in the mainland after a four-month hiatus. IPOs typically divert funds from existing shares.
Hong Kong shares opened up following another record-high on Wall Street, but then moved into negative territory before later tracking gains in the mainland.
At midday, the Hang Seng Index was up 0.4 percent at 23,208.53 points. The China Enterprises Index of the top Chinese listings in Hong Kong was up 0.8 percent, reaching its highest level since April 10.
The CSI300 of the leading Shanghai and Shenzhen A-share listings gained 0.6 percent, while the Shanghai Composite Index was up 0.4 percent at 2,039.03 points. Both remain in the narrow range they have traded in for nearly three weeks.
Tuesday’s gains came in weak turnover. Shanghai midday volume was below its 20-day moving average for a 12th consecutive session, and Hong Kong was lower for an eighth straight day.
China has cut the level of required serves banks for banks that have sizable loans to the farming sector and small- and medium-sized firms, the People’s Bank of China said late on Monday. [ID: nL4N0OQ2SZ]
“People believe that financial firms such as banks will benefit from an increasingly easing liquidity stance from the government,” said Zhang Gang, senior analyst at Central Securities in Shanghai.
But he said the impact of Monday’s announcement would be limited as the easing move did not exceed expectations.
“Both the main stock index and financial stocks are likely to stage moderate movements in the near term as investors await fresh signs on how China’s economy is performing and future policy moves,” Zhang said.
Industrial and Commercial Bank of China, the top index mover in Shanghai, rose 0.8 percent to its highest since Dec. 17.
Brokerage firms were generally stronger, thanks to the IPO resumption. CITIC Securities was up 1.2 percent in Shanghai and 2.6 percent in Hong Kong. Haitong Securities gained 1.0 and 1.7 percent in the markets respectively.
Macau casinos extended losses, with MGM China Holdings and SJM Holdings each down 5.2 percent.
“The downtrend could continue because the World Cup most likely would draw away lots of attention,” said Ben Kwong, director at KGI Asia.
CITIC Resources Holdings Ltd shares tumbled 6.8 percent after the company said metal it stores at Qingdao port may be affected by a probe into suspected fraud. (Editing by Richard Borsuk)