* SSEC flat, CSI300 -0.3%, HSI +0.4%
* HK->Shanghai Connect daily quota used -2.9%, Shanghai->HK
quota used 2.4%
* FTSE China A50 -0.8%
BEIJING, July 16 (Reuters) - China stocks dropped on Friday
with consumer shares leading the loss, but are on track to post
a weekly gain, boosted by the central bank's surprise cut in
cash that banks have to hold as reserves and hopes for further
** At the midday break, the Shanghai Composite index was
edged down 0.02% at 3,563.79 points, while the blue-chip CSI300
index was down 0.34%.
** The consumer staples sector was down 1.13%, and
the healthcare sub-index was down 0.27%.
** For the week, CSI300 so far increased 1.27%, while the SSEC
also added 1.13%.
** China's central banks made a surprise cut in banks' reserve
requirement ratio (RRR) last Friday, releasing around 1 trillion
yuan in long-term liquidity, lifting hopes for further policy
supports throughout the week.
** Investors' sentiment was also lifted by better-than-expected
June activity data including retail and industrial output,
driven by a rebounding developed market demand coupled with the
sluggish recovery in Southeast Asian exporters.
** The brokerage recommended sectors with long-term growth
potential, as well as investment themes including carbon
neutralization and self-sufficiency in key technologies.
** "(But) as uncertainties about (China's) monetary policy and
sector regulation persist, (it is) likely putting pressure on
stock valuations in the second half of the year," said Zhu
Chaoping, Global Market Strategist with J.P. Morgan Asset
** Chinese H-shares listed in Hong Kong rose 0.19% to
10,194.06, while the Hang Seng Index was up 0.45% at
** The smaller Shenzhen index was down 0.28%, the
start-up board ChiNext Composite index was weaker by
1.12% and Shanghai's tech-focused STAR50 index was
** Around the region, MSCI's Asia ex-Japan stock index
was weaker by 0.27% while Japan's Nikkei index
was down 0.87%.
(Reporting by Cheng leng and Andrew Galbraith; Editing by