China shares outshine Asia as developers climb, lift Hong Kong
* HSI +0.6 pct, H-shares +0.8 pct, CSI300 +2.1 pct
* Chinese developers jump on reported easing in home purchase curbs
* Investors rotating from HK to Chinese developers: traders
* Construction, A-share proxy plays strong
HONG KONG, Nov 1 (Reuters) - Mainland Chinese shares lifted Hong Kong markets with their best daily performance in nearly a month on Thursday, boosted by stronger Chinese economic data and a report that more city governments were easing restrictions on the real estate sector.
The state-run China Securities Journal reported on Thursday that as many as six Chinese cities have made it easier to obtain funds for home purchases which will, in turn, bolster land sales, a major revenue source for local governments.
The Hang Seng Index went into the midday trading break 0.6 percent higher at 21,772.6, just shy of the year's intra-day highs of 21,847.7. The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.8 percent.
The CSI300 Index of the top Shanghai and Shenzhen listings jumped 2.1 percent, while the Shanghai Composite Index climbed 1.8 percent. Both indices are set for their respective best daily performance since October 9, outshining Asian peers on the day.
``Any signs of policy moderation in an important sector like property is always going to help. The better PMI today is also a factor, it gives investors confidence that the economy is recovering,'' said Cao Xuefeng, head of research at Huaxi Securities in Chengdu.
Official and private China PMI surveys for October on Thursday suggest China's economy is finally regaining traction, with the final 49.5 reading for the HSBC PMI its highest since February and the official reading moved back into expansionary territory.
Shanghai-listed Poly Real Estate, among China's largest developers by sales, jumped 5.6 percent to its highest level since July. The Shanghai property sub-index was a standout outperformer among sectors, rising almost 4 percent.
China Vanke jumped 3.5 percent in Shenzhen.
In Hong Kong, traders said some investors were rotating out of Hong Kong developers and into Chinese developers, with the worst seemingly over for the latter and some major Chinese developers reported positive third-quarter earnings.
On the other hand, some investors expect more policy curbs in Hong Kong could be in store because of greater capital inflows.
China Overseas Land & Investment reversed early losses to go into the midday break up 1.2 percent. China Resources Land was up 1.4 percent.
Hong Kong developers Cheung Kong Holdings was up 0.5 percent, while Henderson Land edged up 0.6 percent -- both recovering from steep losses earlier this week after Hong Kong announced late last Friday demand-side home purchase curbs on the sector aimed at reducing foreign demand.
CHINA CYCLICALS, A-SHARE PROXY PLAYS HIGHER TOO
Other growth-sensitive sectors were also stronger, on anticipation that even a modest pick-up in the Chinese property sector will spur demand for construction materials.
Anhui Conch Cement jumped 4.5 percent in Hong Kong and 3.4 percent in Shanghai, both in strong volumes. China National Building Material soared 4.9 percent in Hong Kong to a six-month high.
The outperformance of mainland markets also buoyed A-share proxy plays such as Chinese insurers and brokerages, both sectors highly vested to the onshore market.
China Life Insurance rose 2 percent in Hong Kong and 4.3 percent in Shanghai. Citic Securities rose 2.6 percent in Hong Kong and 2.2 percent in Shanghai.