China shares may stretch gains into 4th day, Hutchison lifts Hong Kong
* HSI +0.6 pct, H-shares +0.2 pct, CSI300 +0.8 pct
China set for 2nd weekly gain, HSI in 6th weekly rise
* Hutchison hits 2-yr high after positive H1 earnings
* China property up again on reported fundraising resumption
By Clement Tan
HONG KONG, Aug 2 (Reuters) - China shares are headed for a fourth-straight daily gain, as Hong Kong tested two-month highs on Friday, led by mainland property counters on signs that regulators are allowing the sector to resume capital raising in the mainland.
Hutchison Whampoa shares soared to their highest in two years after the ports-to-telecoms conglomerate owned by Asia's richest man Li Ka-Shing posted interim earnings that beat expectations.
At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was up 0.8 percent, while the Shanghai Composite Index climbed 0.6 percent. On the week, they are now up 1.8 and 1.5 percent, respectively.
The Hang Seng Index gained 0.6 percent to 22,212.6 points after earlier testing its highest since June 4. The China Enterprises Index of the top Chinese listings in Hong Kong inched up 0.2 percent. On the week, they are up 1.1 percent and down 0.1 percent, respectively.
"After this week, I think a lot of people are now expecting Chinese property to outperform," said Alex Wong, Ample Finance's director of asset management. He added positive earnings may lead to re-rating for Hutchison and its parent Cheung Kong Holdings.
On Friday, Hutchison shares jumped 4.1 percent to its highest since August 2011, while Cheung Kong climbed 1.4 percent. Hutchison's strong first half showing was down to its Europe business and helped offset weak property sales for Cheung Kong.
But such concerns are dissipating for Chinese property developers. China Resources Land swelled 4.4 percent in Hong Kong, while Poly Real Estate jumped 4.1 percent in Shanghai.
The semi-official Securities Times newspaper reported on Friday that Zhejiang-based Xinhu Zhongbao plans to raise 5.5 billion yuan ($897.2 million) in an A-share placement, becoming the first property developer to tap the stock market to raise funds in more than three years.
This added to signs that Beijing is softening on a sector that accounts for a fifth of China's total fixed asset investment, the paper said, and comes after mid-week comments from China's ruling politburo that were seen affirming greater official tolerance for home price increases.
Xinhu Zhongbao Shanghai shares surged 9.9 percent, while Guangzhou R&F Properties climbed 3.6 percent after it posted a 25.3 percent rise in July contracted sales from a year earlier.
But the resumption of new A-share initial public offering approvals may be delayed to October, if financial filings by applicants are not refiled before their expiry in two weeks, the 21st Century Business Herald newspaper reported on Friday, citing an unidentified source.
Babycare products producer Goodbaby International surged 9.2 percent after the same newspaper reported a scheme allowing couples to have a second child in the mainland if they are both only childs could resume soon, with authorities considering a full liberalisation of the policy in 2015.
Children skincare products producer Prince Frog International jumped 7.4 percent, while diary product producer Yashili climbed 2 percent and China Mengniu Diary rose 0.6 percent.
Retailers were also up after Hong Kong retail sales value jumped 14.7 percent in June, which Barclays analysts said were better than expected. Belle International climbed 2.8 percent, while Daphne International surged 11.7 percent.