China stocks fall despite solid manufacturing, services data; Hong Kong also down

China stocks fell on Friday morning, despite a survey showing the country's manufacturing sector expanded at the quickest pace in three months in June.

The CSI300 index fell 0.3 percent, to 3,658.42 points at the end of the morning session, while the Shanghai Composite Index lost 0.2 percent, to 3,182.41 points.

The market reaction seemed largely muted to a survey showing the manufacturing sector expanded at the quickest pace in three months in June, buoyed by strong production and new orders.

The services sector also posted its best performance since March, another official NBS survey found.

Worries over liquidity conditions lingered, after China's central bank skipped open market operations for the sixth day in a row on Friday, citing "relatively high" liquidity levels in the banking system.

For the week, the bank drained a net of 330 billion yuan ($48.77 billion) from the market, the most since February.

"The market will remain rangebound for the time being, in thin trading," Shenwan Hongyuan Securities wrote in a report.

Investors should be cautious as liquidity remains tight at the quarter end, the brokerage added.

Most sectors were little changed at midday, while financial plays dragged.

Hong Kong stocks followed other Asian stocks lower.

The Hang Seng index dropped 0.8 percent, to 25,754.84 points.

The Hong Kong China Enterprises Index lost 0.6 percent, to 10,375.00. ($1 = 6.7666 Chinese yuan renminbi)

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)