* CSI300 -2.8 pct; SSEC -2.6 pct; HSI -0.8 pct
* Regulators crack down on speculation, trading misbehaviours
* margin loans in Shanghai fall for 9th session in a row
SHANGHAI, Aug 31 (Reuters) - China stocks corrected on Monday morning after a 10 percent rally over the past two sessions, as regulators took fresh measures to crack down on speculation and trading misbehaviours.
The blue-chip CSI300 index fell 2.8 percent, to 3,247.39 points at the end of the morning session, while the Shanghai Composite Index lost 2.6 percent, to 3,148.08 points.
Both indexes are set to fall over 14 percent for the month, their third straight monthly declines.
Trading in index futures was relatively calm compared with last week, after regulators took additional steps over the weekend to restrict speculative trading.
Hong Kong stocks also fell after losing the bounce seen late last week.
“A pull back in the market was to be expected as some investors are taking profits after the two days rally,” wrote Gerry Alfonso, director of Shenwan Hongyuan Securities.
“Investors seem to be waiting until the manufacturing PMI figure is released later this week before making significant decisions.”
Investors remained worried over the health of the economy, as first-half profit growth at China’s listed companies slowed to 8.7 percent, from 10 percent a year earlier, official Shanghai Securities News reported on Monday.
Reflecting waning risk appetite, outstanding margin loans - money investors borrow to buy stocks - fell for the ninth consecutive session on Friday in Shanghai to 683.1 billion yuan, reaching the lowest level since December.
Chinese state media announced a slew of confessions on Monday following investigations into recent stock market gyrations, including from a detained reporter who admitted to spreading false information that caused “panic and disorder”.
In separate cases, an official from China’s securities regulator, and four senior executives from CITIC Securities confessed to insider trading, Xinhua reported.
Shares of CITIC Securities plunged 7.9 percent in Shanghai, and 5.1 percent in Hong Kong, triggering a sell-off in the brokerage sector.
Shares of banking heavyweights remained under selling pressure, after China Construction Bank on Sunday reported almost zero profit growth in the first half, joining its state-owned rivals in painting a bleak picture for the sector.
In Hong Kong, the Hang Seng index dropped 0.8 percent, to 21,446.44 points, while the Hong Kong China Enterprises Index lost 1.6 percent, to 9,593.42.
All main sectors lost ground in the city. (Samuel Shen and Pete Sweeney; Editing by SImon Cameron-Moore)