China stocks fall slightly amid investor caution; HK shares also down
* CSI 300 -0.7 pct; SSEC -0.4 pct; HSI -1.1 pct
* Volatility reduced as market sentiment turns neutral
* China's industrial sector still faces strong downward pressure
SHANGHAI, July 22 (Reuters) - China stocks fell slightly on Wednesday morning, with volatility decreasing as investor sentiment calmed, and turned neutral following the market's two-week-old rebound from an earlier collapse.
Hong Kong stocks, which have tracked mainland shares recently, also showed a downward correction.
The CSI300 index fell 0.7 percent, to 4,138.65 points at the end of the morning session, while the Shanghai Composite Index lost 0.4 percent, to 4,000.79 points.
There were signs of growing investor caution, as the Shanghai index has bounced nearly 20 percent from a seven-year low hit on July 9, and is approaching 4,500 -- a level widely seen both as a government target, and a near-term ceiling.
With the market stabilizing, investors have returned their focus to economic conditions, and corporate profit growth.
Giving a reminder that China's economy has yet to find its feet, the Ministry of Industry and Information Technology warned on Wednesday that industry still faces significant downward pressure and "arduous efforts" are needed to stabilise the economy. Continuación...