SHANGHAI, July 21 (Reuters) - China stocks rose early on Wednesday, led by technology and resource, but Hong Kong stocks fell as Beijing’s tight regulation continues to weigh on Internet plays. ** China’s blue-chip CSI300 index rose 0.7%, to 5,144.11 points at the end of the morning session, while the Shanghai Composite Index gained 0.6%, to 3,558.11 points. ** In Hong Kong, the Hang Seng index dropped 0.4%, to 27,159.11 points, while the Hong Kong China Enterprises Index lost 0.5%, to 9,816.57. ** Foreign investors have been buying mainland Chinese stocks via Stock Connect for three straight days despite recent volatility, as China’s low correlations with the U.S. Federal Reserve’s policy offer diversification benefits for global portfolio managers, Mizuho Bank said in a note. ** BlackRock, which this year started treating China as a standalone asset class separate from emerging and developed markets, said in a weekly note that following China’s cut in banks’ required reserves, “we see potential for more, broad-based loosening in the near term, including in fiscal and other policies.” ** But Swiss private bank Union Bancaire Privée (UBP) expressed caution, reducing its Chinese equity exposure from overweight to neutral. “Chinese equities were hurt by the first-in, first-out effect and in the short term, regulatory risks remain significant.” ** China’s tech-focused STAR market jumped over 3% following recent corrections, while resources and new energy shares also rose sharply. ** In Hong Kong, property shares rebounded. Shares in Chinese property giant Evergrande Group rose 0.5%, after falling 33% in the previous two sessions. A local housing authority in China removed an earlier sales suspension at Evergrande’s residential projects on Tuesday. ** CSOP China Healthcare Disruption Index ETF debuted in Hong Kong on Wednesday, and the ETF dipped 0.6% by midday break. ** The Hang Seng Tech Index fell, as Beijing’s tight regulations continue to weigh on the sector. (Reporting by Shanghai Newsroom; Editing by Shailesh Kuber)