China shares edge higher as economic recovery continues

* SSEC 0.1%, CSI300 0.5%, HSI 1.9%

* Factory activity grows in January, but more slowly

* Silver miners jump as metal price rallies

SHANGHAI, Feb 1 (Reuters) - China shares rose on Monday, rebounding from the previous week’s drop, after growing factory activity in January underscored a continued recovery in the world’s second-largest economy, although fresh domestic lockdowns hit pace of growth.

** At the midday break, the Shanghai Composite index was up 0.1% at 3,486.46 points. ** China’s blue-chip CSI300 index had risen 0.52%, with its financial sector sub-index higher by 0.32%, the consumer staples sector up 0.33%. ** The healthcare sub-index rebounded 1.86% after losing nearly 7% between Monday and Friday. ** China’s factory activity grew in January, in line with the country’s ongoing economic recovery, but it was the slowest pace of growth in five months after a wave of domestic coronavirus infections prompted lockdowns. ** Companies engaged in silver mining and trade jumped as the price of the precious metal rallied. Shengda Resources Co Ltd , Yintai Gold Co Ltd, Henan Yuguang Gold & Lead Co Ltd and Inner Mongolia Xingye Mining Co Ltd gained between 7% and 10%. ** But shares in listed companies linked to China’s HNA Group slumped on Monday, after the troubled conglomerate disclosed that its creditors had applied for its bankruptcy and that nearly $10 billion had been embezzled by shareholders of its three units. ** Hainan Airlines dropped 9.8% and HNA Innovation fell 4.97%. ** Chinese H-shares listed in Hong Kong rose 2% to 11,433.31, while the Hang Seng Index, which lost nearly 4% last week, was up 1.91% at 28,822.61. ** The smaller Shenzhen index was up 0.62%, the start-up board ChiNext Composite index was higher by 1.15% and Shanghai’s tech-focused STAR50 index was down 0.41%. ** The yuan was quoted at 6.4605 per U.S. dollar, 0.47% weaker than the previous close of 6.43. (Reporting by Andrew Galbraith; Editing by Krishna Chandra Eluri)