* SSEC -0.5 pct, CSI300 -0.5 pct, HSI 0.6 pct
* China producer prices unexpectedly rise for 1st time in 5
* Producer price growth suggest better profits, may ease
* Listed units of Sinochem and ChemChina up on merger
SHANGHAI, Oct 14 Hong Kong stocks rebounded on
Friday after producer prices in China unexpectedly rose for the
first time in nearly five years, pointing to higher profits and
giving companies more room to service their debt.
By the lunch break, both the Hang Seng index and the
Hong Kong China Enterprises Index were up 0.6 percent at
23,163.80 and 9,549.40 points, respectively.
Stocks in China sagged, however, as investors took profits
from gains earlier in the week.
The blue-chip CSI300 index and the Shanghai
Composite Index each fell 0.5 percent, to 3,287.38
points and 3,045.14 points, respectively.
The Hong Kong and China markets also looked set for
divergent performances on a weekly basis.
The Hang Seng was poised for a loss of close to 3 percent,
the biggest in a month, while China's indexes looked to advance
around 1 percent.
After a strong third quarter, Hong Kong shares have pulled
back amid an increase in global market volatility ahead of the
U.S. presidential election in early November and an expected
U.S. interest rate hike in December.
Chinese shares have been buoyed by government plans to
reduce a mountain of corporate debt, which could see more
mergers and restructurings. But gains have been pared by
concerns that fresh curbs on property speculation could hit
developers and throw house prices into a correction.
Shares of state-owned companies that have unveiled
restructuring plans, including China United Network
Communications and First Tractor
remained firm on Friday.
Shares in listed subsidiaries of Sinochem Group and
ChemChina rose sharply after Reuters reported that the two firms
are in discussions about a possible merger.
Chinese data for September so far has been a mixed bag for
investors, with markets retreating after disappointing export
and import numbers on Thursday, but drawing some comfort from
pickups in producer and consumer prices reported on Friday.
(Reporting by Samuel Shen and John Ruwitch; Editing by Kim