* SSEC +0.9 pct, CSI300 +1.4 pct, HSI +0.6 pct
* Sinopec, Shenhua add to list of state firms posting robust earnings
* China sets up fund to aid mixed-ownership reforms by SOEs
SHANGHAI, Aug 28 (Reuters) - Chinese stocks extended a hot summer rally on Monday, spurred by financial shares and forecast-beating results from state industrial giants ranging from coal miner Shenhua to refiner Sinopec.
Sentiment was also bolstered by signs that China is stepping up efforts to restructure its lumbering and often inefficient state-owned enterprises (SOEs) by opening the door to more public and private investment in the long-protected sector.
The Shanghai Composite Index gained 0.9 percent to 3,360.17 points by the lunch break, extending its rise above the closely-watched 3,300 mark, which has been a stiff resistance level in the past.
There have been only fleeting breaches of 3,300 since 2015 — and the SSEC is getting into technically overbought territory — but analysts said a combination of robust earnings and economic reforms could give the rally more staying power this time.
The blue-chip CSI300 index rose 1.4 percent to 3,848.52.
Financial shares led gains, with brokerages surging as much as 6 percent at one point on expectations they will be the biggest beneficiary of a strong stock market recovery.
“The surge in brokerage shares means the upward trend of the broad market is confirmed,” said Yang Delong, chief economist at First Seafront Fund Management Co.
“The 3,300-point level is now under investors’ stride. We’re already in a bull market, albeit a slow one.”
Earnings for China’s industrial firms rose 16.5 percent in July from a year earlier, data showed on Sunday. Though the pace eased from June, profits in January-July jumped 21.2 percent.
China’s top coal miner China Shenhua Energy Co Ltd delivered its strongest interim results in four years, while oil giant Sinopec, reported its best six-month profit since the second half of 2014, joining a slew of major state firms that report earnings that beat forecast.
Adding to optimism are signs that Beijing is intent on making the state sector more efficient, which could spur merger and acquisition activity and further reduce excess capacity in some industries which has been weighing on returns.
The official China Securities Journal reported on Monday that Beijing has set up a fund dedicated to supporting so-called “mixed-ownership” reforms by SOEs. Separately, Premier Li Keqiang said over the weekend China is looking at fiscal and tax policies that support upgrading its manufacturing sector.
Strength was also seen in the IT sector, which jumped over 2 percent.
The bullishness in mainland stocks spilt over into Hong Kong, where the Hang Seng index added 0.6 percent to 28,003.36 points, while the Hong Kong China Enterprises Index gained 1.0 percent to 11,395.20.
Sector performance was mixed, with financial shares rising strongly, but consumer and services stocks sliding.
Linus Yip, chief strategist with First Shanghai Securities, said that the financial sector is bolstered by expectations of solid earnings reports from major Chinese banks to be unveiled later this week.
“The market has some good expectation and so there’s some kind of a front run before the results come out,” he said.
“It is also helped by what is happening in mainland China....in A shares, we can see financials are doing quite good, which will have a positive impact on peers in Hong Kong.”
Reporting by Samuel Shen and John Ruwitch; Additional reporting by Rushil Dutta; Editing by Kim Coghill