China, HK markets climb on strong financials as traders shift from oil stocks

SHANGHAI, March 17 (Reuters) - China and Hong Kong stocks climbed on Tuesday, supported by financials, as investors rotated out of oil-linked counters that had benefited from Middle East tensions and refocused on fundamentals.

China's blue-chip CSI300 Index .CSI300 rose 0.3% by the lunch break, while the Shanghai Composite Index .SSEC was roughly flat. Hong Kong benchmark Hang Seng .HSI was up 1%.

Financial shares led gains, with onshore financials .CSI300FS up 1.6% and offshore peers .HSCIF up 1.2%. Insurance names .CSI399809 climbed 2.3%.

Market reaction was muted after U.S. President Donald Trump said on Monday that he is seeking to delay a highly anticipated trip to China by about a month because of the Middle East conflict.

Shares in the onshore coal .CSI000820 and oil & gas .CSIH30198 sectors each fell 1.7% after oil prices retreated from recent highs, following the passage of some vessels through the critical Strait of Hormuz.

Hong Kong shares, particularly the Hang Seng Tech Index .HSTECH, had built up sizable short positions during the recent selloff, analysts at Huatai Securities said in a note.

With equity volatility rising globally, the risk-reward for leveraged long-short bets has deteriorated, prompting short covering over the past two weeks that helped put a floor under the market, analysts added.

The Hang Seng Tech Index extended gains on Tuesday, up 1.2%, after hitting its lowest level in nearly a year earlier this month. Investors eye Tencent's 0700.HK annual results, due on Wednesday, to gauge its AI growth, which could influence the index.

Shares of Bright Smart Securities 1428.HK surged 66% after Ant Group said it had received regulatory approval to acquire a controlling stake in the company.

Jewellery group Chow Sang Sang 0116.HK rose as much as 13%, marking its largest one-day gain in seven months on the back of a robust earnings forecast.