April 22, 2016 / 4:31 AM / 2 years ago

China stocks fall as resources shares slump; Hong Kong also down

* CSI300 -0.2 pct; SSEC -0.6 pct; HSI -1.0 pct

* Resources shares slump as China acts to cool commodities trading

* China stock on track to post biggest weekly decline in 3 months

SHANGHAI, April 22 (Reuters) - China stocks fell on Friday morning, on track to post their biggest weekly decline in three months, as resource shares tumbled after regulators moved to cool commodities trading amid signs of overheating.

Hong Kong shares also weakened, tracking regional markets, after Wall Street suffered its first loss in four sessions amid disappointing earnings from U.S. blue chip companies.

China’s blue-chip CSI300 index fell 0.2 percent, to 3,153.65 points by lunch break, while the Shanghai Composite Index lost 0.6 percent, to 2,935.35 points.

China’s stock market has become increasingly volatile in recent weeks as a seven-week rebound loses steam.

Lu Jie, head of China research at Robeco Asia Investment Center, attributed the rising volatility to fragile investor confidence.

“It’s still very much a game between existing players. Fresh money is not coming in,” Lu said.

“Investors would race to take profit from any rebound, fearing they would be late in coming out.”

Barring a sharp reversal in afternoon trading, both indexes are poised to have their worst week since the end of January.

Sentiment in China was soured by a 3.5 percent slump in the resources sector.

Shares of steelmakers, gold miners and copper producers tumbled after China’s three futures exchanges announced late on Thursday that they would increase transaction costs to curb speculation in commodities trading.

In Hong Kong, the Hang Seng index dropped 1.0 percent, to 21,416.44 points, while the Hong Kong China Enterprises Index lost 1.5 percent, to 9,106.37.

Shanghai-traded shares of China United Network Communications Ltd fell 1.5 percent, after the telecom operator reported a 86.1 percent drop in first quarter net profit.

Samuel Shen and Pete Sweeney; Editing by Sam Holmes

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