SHANGHAI, Dec 22 (Reuters) - China and Hong Kong stocks rose on Monday, buoyed by signs of continued money inflows, and the creation of a free trade port in tropical island Hainan.
** China's blue-chip CSI300 Index .CSI300 rose 0.8% by the lunch break, while the Shanghai Composite Index .SSEC gained 0.6%. In Hong Kong, the Hang Seng index .HIS climbed 0.2%.
** Latest data shows China's private fund sector expanded to a record 22.1 trillion yuan in November, aided by strong flows into equities.
** Meanwhile, more than a dozen newly launched Chinese funds with a focus on the Hong Kong market finished fundraising ahead of schedule, with many rushing to build positions, indicating an urge to buy the dip.
** Market sentiment was also lifted by surges in Hainan stocks, after China last week started operation of the Hainan Free Trade Port in a landmark move signalling Beijing's commitment to opening-up.
** Potential beneficiaries, including China Tourism Group Duty Free Corp 601888.SS, Hainan Airlines Holding Co Ltd 600221.SS, Hainan Airport Infrastructure Co Ltd 600515.SS and Hainan Strait Shipping Co Ltd 002320.SZ, all shot up by their 10% daily limit.
** "The market is expected to resume its upward trend, and is no longer hesitating," Orient Securities said in a note to clients.
** "Now could be a good time to add positions," the brokerage said, recommending blue-chips and undervalued consumer players.
** China's chip makers .CSI931743 and artificial intelligence stocks .CSI930713 jumped on Monday, while banks .CSI399986 and industrial .CSI000910 stocks fell.
** Xiaomi Corp 1810.HK dropped 2.1% in Hong Kong and BOE Technology Group 000725.SZ lost 0.7% in Shenzhen, underperforming the broader market, after U.S. lawmakers urged the Pentagon to add them to a list of entities allegedly assisting the Chinese military.
(Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)
((samuel.shen@tr.com))
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