* HK's Hang Seng index flat, hovers near 1-mth high
* Shanghai Composite down 0.4 pct; insurers, financials drop
* Iron & steel stocks rise on pricing, growth prospects
(Updates to midday)
By Vikram S Subhedar and Farah Master
HONG KONG/SHANGHAI, Sept 7 (Reuters) - Hong Kong and Shanghai stocks took a breather on Tuesday with key indexes flat to slightly lower as some investors pocketed gains after recent rallies as they awaited data from China.
Hong Kong's benchmark Hang Seng Index was flat at 21,357.1 while the China Enterprise Index slipped 0.1 percent.
The Shanghai Composite ended 0.4 percent lower at 2,686.0 points by midday after trading flat for a large part of the morning session, stumbling at a key resistance level again as insurers and financials fell.
Analysts said investors were warned off by the 2,700 mark, a level the index has failed to breach several times in the last month.
"The pressure today is from insurers like Ping An, which gained considerably yesterday," said Chen Xingyu, analyst at Phillip Securities in Shanghai.
Ping An Insurance fell 1.7 percent, while China Pacific Insurance Group fell 1.1 percent. Insurers outperformed on Monday after China said it would allow them to broaden investment channels into private equity and real estate.
Financials were mostly weaker with Everbright Bank, one of the most actively traded stocks on the Shanghai exchange, down 1.1 percent.
Sustained rises in most steel companies prevented larger falls in the broader index after media reports on Monday said some steel mills were ordered to shut down.
Manshan Iron and Steel rose 7 percent and Wuhan Steel gained 0.8 percent, while Baoshan Iron & Steel, dropped 0.3 percent on profit taking.
"The 2,700 mark is a tough one to break through in the near term," said Xu Yinhui, analyst at Guotai Junan Securities.
"Most investors are now waiting for economic figures for August to be released in the next week," Xu said.
HK STEADIES
Shares in Hong Kong were little changed by midday, hovering near a one month high, with turnover subdued as a U.S. market holiday on Monday and the absence of major economic or earnings data kept investors on the back foot.
"There's still optimism about global growth but we're seeing some consolidation after the rise over the past few sessions," said Steven Lam, vice president at Karl-Thomson Securities in Hong Kong.
Resources stocks outperformed with iron and steel companies leading gains after China's moves to consolidate the industry and improve efficiencies.
"The government policy to close small plants and consolidate the industry is good for larger players since it will temporarily boost steel prices," said Lam, although he warned that some stocks had run up very quickly and could be poised for a pullback.
Maanshan Iron, up 5.3 percent, had gained nearly 16 percent over the past two days, the biggest two-day rise in over 15 months. Rival Angang Steel was up 4.2 percent.
Shares of Aluminum Corp of China were up 1.7 percent, building on Monday's gains, which came on the back of improved optimism over the global economy as a run of better-than-expected data tempered gloomy forecasts.
Market players will now focus on a flood of Chinese data as early as this week that is expected to show continued moderation in economic growth in August, another bumper trade surplus and an increase in inflation.
($1=6.787 Yuan)
(Editing by Jonathan Hopfner)