* HSI -0.5 pct, H-shares -1.3 pct, CSI300 flat
* Chinese property hit by report warning more curbs possible
* CPIC sinks after Carlyle stake sale, Chinese insurers weak
* Moutai up, A-share investors chase dividend plays
Hong Kong shares retreated on Tuesday, as investors took profit on mainland property counters after an official media report raised fears of more curbs on the sector, stalling its strong gains in recent months.
Several smaller Chinese developers had successfully tapped the credit market in Hong Kong since the start of the year. Stock investors had cheered their fund raising, which improved their balance sheets without diluting equity stakes.
The Hang Seng Index went into the midday trading break down 0.5 percent, while the China Enterprises Index of the top Chinese listings in Hong Kong fell 1.3 percent.
In the mainland, the CSI300 of the top Shanghai and Shenzhen listings was flat, while the Shanghai Composite Index slipped 0.1 percent from its highest since mid-June 2012.
"There's a lot of liquidity floating around in Hong Kong, so investors have to park their money somewhere in this risk-on environment," said Lee Wee Liat, BNP Paribas' head of property research, referring to the rally in Chinese property shares.
"There won't be anything too draconian from Beijing, but if prices rise any more from here, I'd expect them to pre-emptively intervene by threatening to take away pre-sales rights and other measures that will hurt developers," Lee added.
On Tuesday, shares of China Resources Land fell 2.7 percent from a record closing high on Monday in Hong Kong. Before Tuesday, China Resources Land had jumped 12.3 percent since the start of the year after spiking 69 percent in 2012.
Longfor Properties and Evergrande fell 2.4 and 1.3 percent, respectively, in Hong Kong despite posting December sales that helped both companies exceed their stated 2012 targets.
In the mainland, Poly Real Estate fell 0.8 percent in Shanghai. A sub-index of property listings in Shanghai was an underperformer among sectors, down 0.7 percent.
In a front page editorial, the official China Securities Journal said stricter implementation of curbs on the property sector is necessary to control home prices as the market expects them to climb significantly in the first half of this year.
DIVIDEND PLAYS LIMIT ONSHORE LOSSES
Losses in A-shares on Tuesday were limited by strength in alcohol producers. Kweichow Moutai climbed 2.9 percent in Shanghai after local media said that the sector still offers among the highest cash dividends in the A-share market.
The Shanghai Stock Exchange said in guidelines issued on Jan. 7 that listed companies are encouraged to offer a dividend payout ratio of at least 30 percent.
China Pacific Insurance (Group) Co Ltd (CPIC) shares fell 2.1 percent in Hong Kong after Carlyle Group sold its remaining stake in China's third-largest insurer in a deal valued at up to $790 million.
Weakness in CPIC shares sank other Chinese insurers, another sector that had outperformed in recent weeks after mainland regulators moved to allow eligible insurers to offer mutual fund products through their asset management arms.
China Life Insurance fell 2.8 percent to HK$21.45 in Hong Kong, hit by a downgrade by CICC analysts after it closed on Monday at its highest since May 2011. Its Shanghai shares slid 2.3 percent.