* CSI300 -0.6 pct; SSEC -0.9 pct; HSI -1.05 pct
* Non-finance firms in worst financial shape in a decade-research
* More stimulus expected to support struggling economy
HONG KONG, July 8 (Reuters) - Stocks in China and Hong Kong fell on Friday as persistent weakness in the yuan fed fears of capital outflows at a time of deepening uncertainty about Europe's economy after Britain voted to leave the European Union last month.
Potential trouble in Europe - one of China's major export markets - could exacerbate pressure on the mainland economy as a recovery struggles to gain momentum.
The headwinds are aplenty. Listed Chinese companies other than those in the finance sector are in their worst financial shape in a decade, a research body under China's Ministry of Commerce said.
It said an index which tracks the health of 2,560 non-finance listed companies is expected to fall to a decade-low this year, which would be the fastest on-year drop in five years.
While Beijing is expected to offer more stimulus to spur activity, investors remain wary amid a global backdrop of Brexit-driven uncertainty.
"Sectors including national defence and military equipment rose today, while cyclicals fell after recent rallies," an analyst at a regional brokerage in Shanghai said.
"Traditionally, July is a good month for stock market, but uncertainties remain due to risks from Europe and yuan depreciation pressure," he added.
The yuan slipped against the dollar on Friday, even after China reported a surprise increase in June foreign exchange reserves, heightening worries that a weakening yuan could trigger more capital outflows in coming months.
The mainland's blue-chip CSI300 index fell 0.6 percent to 3,191.60 points by the lunch break, and the Shanghai Composite Index slid 0.9 percent to 2,990.68.
Both indices looked set for their second straight week of gains.
Shares in major sectors fell with consumer stocks declining over 1 percent, while banks, resources, and healthcare also slid.
In Hong Kong, the blue-chip Hang Seng Index fell 1.05 percent to 20,488.71, and the China enterprises index lost 1.21 percent.
The indices were poised for more than 1 percent fall for the week, ending two straight weeks of rallies. (Reporting by Michelle Chen and Donny Kwok; Editing by Shri Navaratnam)