China stocks caught in tug-of-war between weak yuan and stimulus hopes, HK up
* CSI300 -0.6 pct; SSEC -0.5 pct; HSI +0.8 pct
* China's yuan edged up vs dollar, pulling away from low
* More stimulus expected to support struggling economy
HONG KONG, July 7 (Reuters) - Stocks in China slid on Thursday as investors feared further weakness in the yuan and instability in Europe, one of the country's biggest export markets.
News of a rise in non-performing loans at the country's banks also rattled investors, weighing on bank stocks, but continued expectations of more stimulus measures for the struggling economy helped to keep losses in check.
The mainland's blue-chip CSI300 index fell 0.6 percent to 3,197.53 points by the lunch break, and the Shanghai Composite Index slid 0.5 percent to 3,002.51.
Both indices appeared on track for their biggest one-day percentage decline since June 24, after Britain voted to secede from the European Union.
The yuan has fallen about 1.6 percent since Brexit to 5-1/2 year lows. Though the currency steadied on Thursday, most analysts and traders believe the central bank will allow it to drift further to support struggling exporters.
Sector performance was mixed with consumer stocks , resources, and healthcare posting gains, while banks slid on worries about growing bad loans. Continuación...