China stocks extended gains on Friday after five major state banks cut interest rates on some deposits, while Tencent and Netease dragged down Hong Kong shares after China issued draft rules for online game management.

 

** The blue-chip CSI 300 Index rose 0.7%, and the Shanghai Composite Index added 0.5%.

** Hong Kong's Hang Seng Index fell 0.4%, and the Hang Seng China Enterprises Index lost 0.7%.

** Asian stocks were poised to eke out gains for the final full trading week of the year, while the dollar eyed a loss as investors look to 2024 as a year of steep U.S. rate cuts.

** Five of China's largest state banks, including Agricultural Bank of China and China Construction Bank, cut interest rates on some deposits from Friday, providing room to reduce lending costs as the government urged banks to support the economy.

** "Lower deposit rates should help alleviate pressures on bank net interest margins (NIM) and lay the groundwork for the PBoC to cut its policy lending rates (OMO and MLF) in January," said Ting Lu, chief China economist at Nomura.

** "If these cuts materialise, it would signal Beijing has become increasingly concerned about the downward pressure on growth... we expect the PBoC to cut its policy lending rates in January 2024. "

** Shares in energy and new energy gained 1.5% and 2.3%, respectively, to lead the gains, while media firms lost 2.4%.

** China unveiled new draft rules for online video games, imposing strict rules on players' spending as Beijing continues to tighten regulations for the sector.

** Shares in gaming giant Tencent and Netease slumped 7.2% and 12.2%, respectively, to lead the decline.

** The Hang Seng Tech Index lost 1.5%.

(Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)