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* SSEC down 0.2 pct, CSI300 up 0.5 pct, HSI 1.1 pct
* China's "nifty 50" index highest since Nov. 2015
* Sunac China shares jump after $9.3 bln deal with Dalian Wanda
SHANGHAI, July 11 (Reuters) - China stocks were mixed on Tuesday, with blue-chips firming as investors chased companies with solid fundamentals while small-caps extended a fall on expectations more equity issuance would soften valuations.
The CSI300 index rose 0.5 percent, to 3,670.57 points at the end of the morning session, while the Shanghai Composite Index lost 0.2 percent, to 3,206.96 points.
An index tracking 50 blue-chips in Shanghai, dubbed China's "nifty 50" index, rose 0.7 percent to a 20-month high as investors continued to chase blue-chips with solid fundamentals. This follows MSCI's decision to include China's 222 big-caps in its key index.
At the smaller end of town, however, the tech-heavy start-up board index ChiNext lost 0.6 percent following a 1.8 percent slump on Monday, with six small-cap stocks tumbling the 10 percent trading limit. Small-caps have weakened after the securities regulator approved more initial public offerings over the weekend.
China's central bank resumed open market operations to inject 40 billion yuan ($5.88 billion) into money market on Tuesday, after abstaining from open market operations during the previous 12 sessions.
The tight liquidity conditions will last for a relatively long time, as the central bank's current moves to maintain stability in the market were only meant to prevent financial risks amid Beijing's concerted campaign to deleverage, Bohai securities analyst Song Yiwei wrote in a report.
Financial and consumer stocks led the advance in the morning, while material firms took a breather after recent strong gains and a weak dollar.
Investors are likely to be wary of stocks trading at high levels with a rotation into big-caps extending into other sectors, including cyclical shares, which could mean rising risks amid tight liquidity in the market, Song wrote.
Hong Kong stocks extended a rally, aided by strong gains in financial firms. The Hang Seng index added 1.1 percent, to 25,786.35 points.
The Hong Kong China Enterprises Index gained 1.4 percent, to 10,362.05.
An index tracking major financial plays rose 1.6 percent in the morning.
Shares of Sunac China Holdings Ltd surged nearly 7 percent on resumption of trade on Tuesday, a day after the acquisitive developer agreed to buy tourism projects and hotels from Chinese property giant Dalian Wanda Group for $9.3 billion.
($1 = 6.8040 Chinese yuan)
Reporting by Luoyan Liu and Andrew Galbraith; Editing by Sam Holmes