China and Hong Kong shares fell on Thursday as weaker-than-expected lending data triggered liquidity concerns and weighed on sentiment.

** The CSI300 index fell 0.6% to 4,984.51 points at the end of the morning session, while the Shanghai Composite Index lost 0.1% to 3,528.27 points.

** In Hong Kong, the Hang Seng index dropped 0.1% to 26,636.92 points, while the Hong Kong China Enterprises Index lost 0.3% to 9,516.72.

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** China's new bank loans fell to 1.08 trillion yuan ($166.5 billion) in July, its lowest in nine months.

** Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 10.7% in July - the weakest reading since February 2020 - from a year earlier and from 11% in June.

** "We expect the slowdown and resulting headwind to the economy to continue in the coming months, further RRR and policy rate cuts notwithstanding," Capital Economics said in a note.

** Consumer staples sub-index went down 1.2%, while the healthcare sub-index slipped 1.4%.

** The steel sub-index gained 3.22%.

** The semiconductors sub-index rose 0.73%. The index has gained around 35% so far this year. The tech-heavy STAR market rose 0.4% on the day.

** "We expect STAR/ChiNext to continue to outperform in the near term as they are skewed to new energy, semi and computers with improving fundamentals," wrote Meng Lei, A-share Strategist at UBS Securities. "However, we do not think liquidity will ease further in the near term unless there is material downside risk to the economy."

** In Hong Kong, healthcare shares also fell, with the sub-index going down 3.2%.

** Insurers listed in Hong Kong fell, a day after China Banking and Insurance Regulatory Commission said it would strengthen oversight on products, sales, claims and information security of online insurers.

** Chinese online insurer ZhongAn led the decline, with its shares tumbling 9.4%. The financials sub-index dropped 0.8%.

** Heavily-indebted developer China Evergrande Group plunged over 7% after a strong rebound earlier this week that came on the back of asset sale plans.