* HSI +0.2 pct, HSCE +0.5 pct
* Mainland markets closed for holiday, reopen Wednesday
* China property groups jump on strong demand in smaller cities
* Hong Kong property firms up despite higher mortgage rates
HONG KONG, May 29 (Reuters) - Hong Kong stocks edged up on Monday, when China markets were closed, as investors accumulated laggards and mainland property shares stayed solid on anticipation of strong home demand in smaller cities.
The blue chip Hang Seng index gained 0.2 percent at 25,689.24 points and the Hong Kong China Enterprises Index rose 0.5 percent to 10,636.78.
China Resources Power jumped 5.7 percent by lunch break to its highest since November 2015, and China Resources Land climbed 3.8 percent to the highest since September.
Other mainland developers also surged. China Evergrande soared 25.4 percent, reaching a record high. Country Garden climbed 10.9 percent and Agile Group rose 8.7 percent.
"It is seen to be more healthy when buying interest is not only focusing on Tencent but shifting to laggards and some high yield stocks," said Steven Leung, sales director at UOB Kay Hian.
Shares of Tencent Holdings, which have gained more than 12 percent this month, fell 1.4 percent.
Local property sector remained strong with property sub-index rose 1.2 percent, ignoring Hong Kong banks' move over the weekend to up mortgage rates.
Large commercial banks in the mortgage loans market, including Standard Chartered PLC , HSBC Holdings PLC and Bank of China Hong Kong, said they would raise interest rates following the latest round of mortgage tightening measures by the city's de facto central bank.
Reporting by Donny Kwok; Editing by Richard Borsuk