* SSEC +0.4 pct, CSI300 +0.5 pct, HSI +0.1 pct
* Financials bounce as c.bank injects medium-term funds
* Shanghai shares poised for 5th straight week of losses
SHANGHAI, May 12 China's main stock indexes
extended gains on Friday morning, as the central bank's move to
inject funds amid liquidity worries offered some solace.
The CSI300 index rose 0.5 percent, to 3,373.49
points at the end of the morning session, and the Shanghai
Composite Index gained 0.4 percent, to 3,073.48 points.
Both indexes remained on track for a fifth straight week of
losses amid persisting regulatory worries.
China's central bank injected fresh funds through a
medium-term lending facility on Friday while keeping a tight
rein on short-term funding. This appeared to be a further effort
to dampen speculative investment while the economy remains
The central bank also issued a notice to banks to inquire
about interest rates on inter-bank borrowings, loans and bill
markets, the official Shanghai Securities News reported on
Tight liquidity conditions have been a major concern for
investors amid a crackdown on banks' risky financial activities
with a focus on shadow banking.
In the morning, financial plays led gains, in particular
bank stocks, whose index rallied 2 percent,
positioning it for the best day since mid-August.
Authorities tended to maintain stability in the financial
markets ahead of major events, such as a Silk Road summit this
However, there were no specific signs that the heavy hand of
regulation would loosen.
China's banking regulator this week launched emergency risk
assessments of lenders' new business practices, sources told
Reuters, as Beijing deepens its crackdown on shadow banking.
"The tightening liquidity conditions and financial
regulations would probably continue, and chances are small for
authorities to reverse the shift to a tightening bias," said Yan
Kaiwen, an analyst with China Fortune Securities.
On Friday morning, Hong Kong stocks inched up, hobbled by a
downbeat day on Wall Street but still on track for handsome
gains this week.
The Hang Seng index added 0.1 percent, to 25,144.57
The Hong Kong China Enterprises Index gained 0.2
percent, to 10,273.06.
($1 = 6.9014 Chinese yuan)
(Reporting by Luoyan Liu and John Ruwitch; Editing by Richard