(Updates to midday)
* HSI jumps 1.8 pct, CSI300 climbs 0.7 pct
* High div yielding stocks likely favoured this earnings season: Haitong
* China insurers strong after encouraging June premiums
* China railway sector jump on prospect of investment doubling in H2
By Clement Tan and Vikram Subhedar
HONG KONG, July 17 (Reuters) - Hong Kong shares gained on Tuesday, outperforming Asian peers with Chinese financial and infrastructure-related sectors strong on anticipation of more policy support.
But with profit warnings emerging daily during the past week ahead of the interim earnings reporting season in August, the advances appears to be largely technical.
The China Enterprises Index of the top Chinese listings in Hong Kong rose 1.9 percent. The Hang Seng Index gained 1.8 percent to 19,455.4, with its 200-day moving average at 19,570.3 seen as the next chart resistance level.
Stop-losses for short positions on Hang Seng Index futures contracts were triggered at around the 19,200 level shortly after the market opened, providing extra bounce for the index, traders said.
"With sentiment so adverse right now and with high growth days over for Chinese companies, investors are probably looking to reward those with a high dividend yield in this transition period," said Edward Huang, an equity strategist with Haitong International Securities.
Among the top gainers on the Hang Seng Index, Cosco Pacific , up 3.8 percent, has a dividend yield of 4.6 percent. Hong Kong property developer Sino Land, up 4.3 percent, has a dividend yield of 3.3 percent.
Mainland Chinese markets edged off six-month lows, with the CSI300 Index, which tracks the top 300 listings in Shanghai and Shenzhen, up 0.7 percent at midday after ending at its lowest close since Jan. 16 this year on Monday.
The Shanghai Composite Index rose 0.6 percent from its lowest close in more than three years on Monday.
BANKS
Some banks also made a good showing on the Hang Seng.
Chinese banking majors, Industrial and Commercial Bank of China (ICBC) gained 2 percent, China Construction Bank (CCB) was up 1.7 percent and Bank of China gained 1.4 percent.
They each have dividend yields exceeding 6 percent.
All three banks have underperformed the broader Hong Kong market this year to date and have been trading near historically low valuations.
Investors have shunned the banking sector due to concerns over bad debts, and recent cuts in lending and deposit rates are expected to squeeze banks' interest rate margins and hurt their profitability.
In a note to clients on Tuesday, Citi analysts reiterated their "underweight" position on the sector after meeting with several Chinese financial firms in Beijing and Shanghai.
"The meetings confirm our view that earnings growth for banks is slowing significantly, bank earnings seem to be peaking and policy risks continue to hang over net interest margins and fees, while credit is deteriorating moderately," they said.
CHINA RAILWAY, INSURERS STRONG
Railway stocks jumped after China's National Development and Reform Commission said railway infrastructure investment in the world's second-largest economy in the second half could double that in the first half.
China Railway Construction (CRC) jumped 3.1 percent in Hong Kong and 2.9 percent in Shanghai. Like its sector peers, CRC has outperformed this year on expectation that Beijing will rely on infrastructure invesmtment to stimulate growth in the fast-slowing Chinese economy.
In the year to date, CRC has surged more than 55 percent in Hong Kong and more than 22 percent in Shanghai. This compares with the 5.5 percent gain on the Hang Seng Index and 3 percent gain on the CSI300 Index.
Chinese insurers were broadly stronger after China Life Insurance and China Pacific Insurance Company (CPIC) posted encouraging June premium growth, with life premium improving for a second-straight month.
China Life, the mainland's largest insurer, jumped 3.8 percent in Hong Kong and 1.7 percent in Shanghai. CPIC rose 2.9 percent in Hong Kong and 1.4 percent in Shanghai.
"While it is too early to call a growth recovery, the worst may be over for life premium growth as we move into 2H12, in our view, due to a relatively low base in 2H11 and easing competitive pressure from wealth management products," Deutsche Bank analysts said in a note to clients on Tuesday. (Editing by Simon Cameron-Moore)
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