* HSI +0.4 pct, H-shares +0.8 pct, CSI300 +3.1 pct
* HSI stymied again at resistance at May 2011 high
* China banks, brokers gain on policy cues
* China Cosco hammered after profit warning
China shares jumped to their best day in two weeks on Monday, sparking Hong Kong gains, as investors welcomed comments by a senior central bank official seen as a tacit admission that bank profits need to be protected.
In comments carried in multiple Chinese newspapers, Pan Gongsheng, a deputy governor of the bank, said that the pace and timing of freeing interest rates must consider banks' profitability and capability of replenishing capital, as the two factors affect credit supply to the whole economy.
The CSI300 of the top Shanghai and Shenzhen A-share listings jumped 3.1 percent, while the Shanghai Composite Index climbed 2.4 percent as volume spiked 38 percent from Friday.
Monday's gains were the best since Jan. 14 and helped onshore Chinese indexes close at their highest since mid-2012. They breached a trading range that has contained movements for about two weeks, pointing at further gains.
This lifted Hong Kong markets, helping the Hang Seng Index close up 0.4 percent at 23,671.9, though it failed again at chart resistance at about 23,708, its peak on May 31, 2011. This level has stymied gains on the benchmark for more than a week.
The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.8 percent, with mid-sized mainland banks among the biggest percentage risers as Hong Kong turnover sank on Monday to its second weakest this year.
Pan's published comments also included one pledge to further develop the onshore bond market to reduce balance sheet risks for banks and another to begin publishing a regional breakdown of total social financing, an indicator recently developed to measure on and off-balance sheet lending.
"Earnings of mid-sized Chinese banks are going to outperform bigger rivals, partly given their lower base, but also because they have been more aggressive in innovating financial products," said Hong Hao, Bank of Communication International's chief strategist.
China Minsheng Bank surged 7.2 percent to its highest close in five years in Shanghai. Minsheng, which gained 33 percent in 2012, is up 27 percent in January.
The bank is now at its most technically overbought level in Shanghai since January 2007. News reports in state media last week suggested that Minsheng was among the top five stocks sought by among mainland mutual fund managers in the fourth quarter of 2012.
Minsheng's Hong Kong listing moved up a more modest 3.1 percent to the highest close since its 2009 debut.
Investors also cheered a plan to double the number of A-share listings eligible for short selling or margin trading, bolstering shares of Chinese brokerages.
Haitong Securities , China's second-largest listed brokerage, soared 8.2 percent to its highest close since November 2010 in Shanghai. It rose 3.7 percent in Hong Kong.
UNEVEN PROFIT RECOVERY
Profits earned by China's industrial companies rose 17.3 percent in December from a year earlier to 895.2 billion yuan ($143.91 billion), official data showed on Sunday, as a fourth-quarter recovery helped offset weaker corporate results in the third.
But in a sign that this recovery will not encompass all sectors, shares of China Cosco Holdings dived after the world's largest bulk cargo fleet operator said it expects a second-straight year of losses in 2012.
Its Hong Kong shares tumbled 5.1 percent to their lowest close since Jan. 2, while its Shanghai listing faces the prospect of delisting if the company does not turn a profit in 2013.
Under China's securities regulations, companies that report two consecutive years of losses get placed in the "special treatment" category, which limits the daily trading movement of their shares to 5 percent instead of 10 percent.
Kweichow Moutai dived 5.6 percent, hit by a Credit Suisse downgrade from overweight to neutral after the company last week posted below-expectations preliminary corporate earnings.