* Hang Seng Index edges up after Wednesday's 1.4 pct drop
* Shanghai slips on weak energy counters, Shenhua top drag
* Railway issues surge on govt plan for high-speed rail
* Brokers see HSI up 19 percent by end-2011 - Reuters poll (Updates to midday)
By Vikram S. Subhedar and Farah Master
HONG KONG/SHANGHAI, Dec 9 (Reuters) - Shanghai shares slipped in tepid volume on Thursday morning, with declines in energy counters offsetting strong gains in railway-related issues, which extended gains on government infrastructure plans.
Hong Kong's Hang Seng Index was up 0.28 percent by the midday trading break in another day of thin volume, with heavyweight HSBC Holdings Plc and China Unicom (Hong Kong) Ltd helping to keep the benchmark in positive territory. The China Enterprises Index was flat.
The market has remained largely rangebound this week, but a Reuters poll showed brokers expected the benchmark to gain about 19 percent by the end of 2011, which could make it the top performing major index behind Russia.
Shanghai's key stock index was down 0.7 percent to 2,827.4 by midday, staying below the closely-watched 250-day moving average.
Speculative investors, looking to inflation data due on Saturday, are cautiously selecting sectors they see as safe bets in the near term, with many keeping to the sidelines while they await clarification of the government's monetary tightening policies.
"Everybody is just waiting. This is a sensitive period with high inflation expected and a likely interest rate rise. Investors are therefore going to focus on sectors such as rail and steel, which benefit from policy measures," said Galaxy Securities analyst Ren Chengde in Shanghai.
Heavyweight oil majors such as PetroChina Co Ltd, down 1.5 percent, and China Petroleum & Chemical Corp (Sinopec), off 0.7 percent, weighed on the broader index. The world's most valuable coal producer China Shenhua Energy Co Ltd slipped 1.3 percent.
Railway-related issues stood out. The sector continued to attract investor interest, dominating the top gainers list, after official media reported on Wednesday that China planned to invest up to 4 trillion yuan in its high-speed rail network.
Railway manufacturer Jinxi Axle Co Ltd jumped by its 10 percent limit, while China Railway Erju Co Ltd gained 8.3 percent.
Among the most actively traded shares, China Railway Construction Corp Ltd climbed 4.7 percent and train wheel manufacturer Maanshan Iron and Steel Co Ltd advanced 5.8 percent.
HK STEADY, UNICOM JUMPS
Chinese railway stocks were also the top performers on the Hong Kong bourse, with steel names also benefitting from Beijing's plan to support rail infrastructure.
China Railway Group Ltd rose 5 percent.
Among benchmark constituents, China Unicom rose 2.7 percent, the top performer on the Hang Seng Index, after the country's No.2 mobile operator more than halved the monthly subcription rate of its entry-level 3G mobile package in a bid to increase its customer base.
Those gains, along with a 0.8 percent rise in the index's biggest weighted stock HSBC, helped the Hang Seng Index trade slightly higher before the break.
Standard Chartered Plc was up 3.8 percent. The bank said in a statement during the trading break that it expected to post strong 2010 results on the back of double-digit growth in pre-tax profit in consumer and wholesale banking.
Turnover remained light as many investors continued to stay on the sidelines ahead of the China's Central Economic Conference and the weekend's macro data, said traders at Daiwa Capital in a note to clients.
China's moves to tighten monetary policy were likely to remain an overhang as a PBOC decision not to issues three-year bills on Thursday triggered concern of further measures to absorb liquidity, said the traders.
The Chinese central bank's recent open market actions suggest it could further raise bank reserve requirement ratios soon.
Property counters capped the index's advance on the day. Hang Lung Properties Ltd was down 2.5 percent, and Sino Land Co Ltd eased 1.3 percent as residential developers continue to see rotation out of the sector.
Citic Pacific Ltd fell 2.2 percent after brokerage Morgan Stanley downgraded the stock to equal-weight from overweight. ($1=6.66 Yuan) (Editing by Chris Lewis)