HONG KONG, Feb 26 (Reuters) - China stocks edged lower on Thursday, snapping a two-day post-Lunar New Year rally, as investors held off on major moves ahead of an annual parliamentary meeting next month.

** At the midday break, the Shanghai Composite index .SSEC was down 0.1% at 4,144.08 points, surrendering its opening-hour gains.

** China's blue-chip CSI300 index .CSI300 edged 0.2% lower.

** The property sector led the declines, with the CSI 300 Real Estate Index .CSI000952 down 2.7%. That has wiped out all the gains seen during the session on Wednesday after Shanghai relaxed home purchase eligibility further for non-residents.

** Also weighing on the markets on Thursday, the liquor sector .CSI399997 weakened 1.3% and the energy sector .CSI000908 lost nearly 1%.

** "With the Shanghai Composite Index gradually approaching the highs before this round of correction, the spring rally has entered its second half," Huatai Futures analysts said in a note.

** Trading sentiment has cooled following the post-Lunar New Year catch-up bounce, with market focus now shifting to the upcoming National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference (CPPCC) meeting sessions for new policy signals and guidance, they added.

** Meanwhile, the CSI AI Index .CSI930713 jumped 0.9% and the info tech sector .CSIINT climbed 1.1%, joining a regional tech rally as upbeat earnings from AI darling Nvidia NVDA.O soothed concerns over AI-driven disruption.

** DeepSeek, the Chinese artificial intelligence lab which is expected to launch a major update, has granted early access to domestic suppliers including Huawei Technologies, adding fresh optimism towards domestic AI development.

** In Hong Kong, the Chinese H-share index, the Hang Seng China Enterprises Index .HSCE fell 1.3% to 8,917.1, while the Hang Seng Index .HSI was down 0.4% at 26,656.29.

(Reporting by Jiaxing Li in Hong Kong; Editing by Sherry Jacob-Phillips)

((jiaxing.li@thomsonreuters.com))