(Updates to midday)
* HSI down 0.6 percent, H-share index down 1.2 percent
* Weak China markets weigh, CSI300 down 1.1 percent afterholiday
* Focus on profits, not policy in China: JPM's Mowat * Tencent, AIA pull back from record highs * ZTE shares slip after draft U.S. Congress report By Vikram Subhedar
HONG KONG, Oct 8 (Reuters) - Hong Kong shares are poised tosnap a five-session streak of gains on Monday as Chinese marketsreopened on a weak footing after a week-long holiday, withinvestors concerned China's slowdown could worsen.
The Hang Seng Index fell 0.6 percent to 20,879.4points by the midday break. The index of top locally listedChinese shares fell 1.2 percent and was the weakestamong regional benchmarks in Asia.
On the mainland, the CSI300 fell 1.1 percent whilethe Shanghai Composite was down 0.8 percent as domesticinvestors returned to the market after the Mid-Autumn Festivaland National Day holidays.
Shares of PetroChina , down 0.7 percent, were thetop losers on the CSI300 followed by major producers of premiumliquor such as Kweichow Moutai , down 3.4 percent,partly on worries over weak sales over the Golden Week holiday.
Chinese shares in Hong Kong led losses with China Mobile
down 1.1 percent while Tencent Holdingsslipped 1.7 percent, pulling away further from a record high hitlast week.
Hong Kong shares had risen for five straight sessions onhopes that China would announce measures to lift growth andboost the market heading up to the once-in-a-decade leadershiptransition expected to get under way next month.
"I think investors are barking up the wrong tree here," saidAdrian Mowat, JPMorgan's chief emerging markets strategist whomaintains an "underweight" rating on China stocks.
"Our mantra on China is focus on profits not policy," saidMowat, adding that excess capacity is still a problem in Chinathat continues to weigh on profit margins.
While the pace of cuts in earnings forecasts has slowedanalysts are still trimming estimates for Chinese profits.
Over the past month, analysts have cut expectations forforward 12-month earnings for MSCI China constituents by 0.3percent, according to Thomson Reuters I/B/E/S.
Earnings season in the United States gets under way onTuesday with aluminum producer Alcoa expected to show itbroke even in the third quarter although investors will likelyfocus more on comments about global demand.
The World Bank cut its growth forecasts for the East Asiaand Pacific region on Monday and said there was a risk theslowdown in China could get worse and last longer than expected.
Worries over growth kept cyclical sectors weak across theboard in Hong Kong with defensives such as utilitiesoutperforming and recent outperformers hit by profit-taking.
CLP Holdings rose 0.5 percent while Hong Kong &China Gas was up 0.4 percent. Insurer AIA Group
eased 1 percent.
ZTE Corp fell 3.7 percent, the top loser on theChina Enterprises Index, after a draft report by the U.S.Congress said China's top telecommunications gear makers shouldbe shut out of the U.S. market because they pose a securitythreat.
(Editing by Jacqueline Wong)
Keywords: MARKETS HONGKONG CHINA STOCKS/ UPDATE 1