* SSEC 0.4 pct, CSI300 0.4 pct, HSI -0.1 pct
* Liquidity stress eased on the mainland at start of year
* Stronger greenback hurts emerging markets
SHANGHAI, Jan 4 China stocks extended Tuesday's
gains on Wednesday morning as improving money market liquidity
and moderating interest rates lifted market sentiment.
Hong Kong stocks edged lower as a strong U.S. dollar
weighed, threatening to break a four-day gaining streak if
losses aren't pared in the afternoon session.
Both the CSI300 index and the Shanghai Composite
Index gained 0.4 percent at the end of the morning
session, to 3,356.13 points and 3,148.29 points respectively.
The Hang Seng index dipped after initial momentum
faded, down 0.1 percent, to 22,130.30 points, while the Hong
Kong China Enterprises Index lost 0.2 percent, to
Analysts say investor confidence on the mainland had been
improving generally as trade volumes appeared to rise after the
market pulled back in December.
That in part is due to an easing of the liquidity stress
that dampened the market in December. Banks, armed with fresh
lending quotas, are now more willing to grant loans from the
start of the year, said Zhang Qi, analyst at Haitong Securities
The 14-day repo rate was 2.5 percent, down
from a 21-month high of 4.46 percent on Dec 29.
Nearly all sectors advanced by midday, but real estate
stocks retreated modestly on fears of new
restrictions on home buying in the overheated property market.
Hong Kong took little encouragement from the mainland. A
stronger U.S. dollar has left Hong Kong stocks vulnerable to a
potential rotation out of emerging markets to the United States.
The dollar index, a measure of the greenback's value
against six major currencies, climbed to 14-year intraday high
Sector performance was mixed, with gains in
telecommunications and industrial stocks
offset by losses in resource shares.
Declines in oil prices hit the share prices of energy majors
. U.S. crude futures retreated nearly 1.7
percent at the lunch break after hitting an 17-1/2-month high in
the previous session.
(Reporting by Jackie Cai and John Ruwitch; Editing by Eric