* CSI300 -0.4 pct; SSEC -0.3 pct; HSI -0.5 pct
* China exports fall 3.7 pct y/y in Sept, imports slump
* Investor confidence improves sharply in Sept - survey
SHANGHAI, Oct 13 (Reuters) - China and Hong Kong stocks retreated Tuesday morning on profit-taking following strong rebounds over the past sessions, with investors unimpressed by China's September trade data suggesting the economy remains under downward pressure.
Also weighing on the markets were energy stocks , which slumped on reports that China plans to cut natural gas prices by as much as 30 percent soon.
China's blue-chip CSI300 index fell 0.4 percent, to 3,434.62 points by lunch time, while the Shanghai Composite Index lost 0.3 percent, to 3,277.66 points.
Newly-released data shows that China's exports fell 3.7 percent from a year earlier in September in dollar-denominated terms, while imports tumbled more than 20 percent.
Although export figures were stronger than expected, the slump in imports points to persistent weakness in the economy, heightening hopes of more stimulus ahead as Chinese leaders gather in Beijing later this month for a key meeting to iron out China's 13th "five-year" development plan.
But David Dai, Shanghai-based investor director at Nanhai Fund Management Co, said fears of a sharp slowdown have been largely priced in, and with the clean-up of illegal margin financing coming to an end, market sentiment is stabilizing.
"It's back to normal. There will be ups and downs, but not the kind of panic selling we saw earlier," he said, referring to the mid-June rout that knocked headline indexes down more than 30 percent in just several weeks.
Dai said his hedge fund has gradually increased stock exposure to 50 percent of the portfolio from just 10 percent a few weeks ago, and he believes some industry peers have also recently hiked their purchases of shares.
His optimism was echoed by an official survey indicating sharply improving confidence among China's stock investors in September, and data showing outstanding margin loans grew for three straight sessions.
On Tuesday, main sectors had mixed performance on the mainland.
Banking shares weakened after brokerage CLSA estimated that Chinese banks' bad loan ratio could be as high as 8.1 percent, significantly higher than the official 1.5 percent.
But transportation stocks rose after China's economic planner approved four railway projects worth 253.27 billion yuan ($40 billion).
In Hong Kong, the Hang Seng index dropped 0.5 percent to 22,619.83 points and the Hong Kong China Enterprises Index lost 0.9 percent to 10,442.67.
Shares of Chinese oil giants Sinopec Corp , PetroChina and CNOOC , slumped after state media reported that China plans to cut city-gate non-residential natural gas prices by up to 30 per cent in some provinces at the end of October.
$1 = 6.3350 Chinese yuan Reporting by Samuel Shen and Pete Sweeney; Editing by Richard Borsuk